2021 saw more inflows to stocks than the past 12 years combined
Money flowing to stocks globally in just the past five months ($576 billion) has exceeded the inflow seen over the prior 12 years by well over $100 billion, according to data from Bank of America Global Research.
Why it matters: It's further evidence that the sea change in investor psychology continues and has grown to a profound new level.
How we got here: Money had consistently flowed out of equity funds as investors sought safety in bonds and money market funds even as stock indexes raced to record highs.
- BofA's data show that since 2008 $2.4 trillion has flowed into bonds while just $1 trillion has gone into equities, about half of which has come just this year.
- Record sums of cash have flown into equity funds this year with the No. 1 and No. 2 largest inflows to stock funds ever both occurring since the start of February.
What to watch: Investors also are loading up with record leverage, borrowing money against their portfolio holdings at the highest rate since 2007, according to Financial Industry Regulatory Authority data.