Illustration: Rebecca Zisser/Axios

The U.S. stock market is up almost 20% this year, but investors have missed out on much of the rally. They've sold equities and piled into bonds and money market funds — effectively low-yield savings accounts — largely out of fear.

What's happening: Institutional money managers and retail investors around the world have pulled a net $140.6 billion out of equity funds in 2019, according to data from Lipper, which tracks $49.1 trillion of assets.

  • The "Twilight Zone" environment, in which equity prices have risen despite net selling of stocks by investors, is taking place all over the world.
  • Investors have bought bonds — a net $255.5 billion so far this year — even though more than $13 trillion of bonds currently hold negative yields, meaning investors lose money by holding them.

What it means: "People don't trust the stock market," Emily Roland, head of capital markets research at John Hancock Investment Management, tells Axios. "I'm more concerned about that than I am about the FOMO trade."

  • "We're seeing everybody embrace safety, which is fine, but from a long-term investing diversification standpoint, it doesn't end up working in your favor."

Details: Lipper's data shows a strong investor preference for safety, as investment grade and short-term government bonds have seen significant inflows, while risky high-yield — or junk — bonds have seen far less.

The returns have been just the opposite of the flows. MSCI's index of equity markets around the globe has risen 16.7% year to date, and MSCI's U.S. index is up 18.9%. High-yield bonds have delivered 9.5% returns for investors, according to Lipper, compared to investment grade bond funds, which have seen 6.2% return.

  • Safe short-dated government bond funds have returned 2.4%, year-to-date, data shows.
  • Investors also have invested a net $148.6 billion into money market funds that collectively yielded less than 1% this year.

Between the lines: "This has been a very unloved bull market by investors,” Roland says. "That's another reason, though, maybe it has some legs left."

What's next? The second half of the year looks to present many of the same potential risks and possible upside as the first.

Go deeper: Global economic whiplash

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Updated 29 mins ago - Politics & Policy

Where key GOP senators stand on replacing Ruth Bader Ginsburg

Senate Majority Leader Mitch McConnell talks to reporters on Capitol Hill last Thursday. Photo: Chip Somodevilla/Getty Images

With President Trump planning to nominate his third Supreme Court justice nominee this week, key Republican senators are indicating their stance on replacing the late Justice Ruth Bader Ginsburg with less than 50 days until Election Day.

The state of play: Senate Majority Leader Mitch McConnell (Ky.) has vowed that "Trump’s nominee will receive a vote on the floor of the United States Senate." Two GOP senators — Sen. Lisa Murkowski (R-Alaska) and Sen. Susan Collins (R-Maine) — have said they oppose holding a vote before the election, meaning that two more defections would force McConnell to delay until at least the lame-duck session of Congress.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 4 p.m. ET: 30,873,714 — Total deaths: 958,383— Total recoveries: 21,103,559Map.
  2. U.S.: Total confirmed cases as of 4 p.m. ET: 6,788,343 — Total deaths: 199,421 — Total recoveries: 2,577,446 — Total tests: 94,211,463Map.
  3. Politics: Testing czar on Trump's CDC contradictions: "Everybody is right" Ex-FDA chief: Career scientists won't be "easily cowed" by political vaccine pressure
  4. Education: What we overlooked in the switch to remote learning
  5. Health: The dwindling chances of eliminating COVID-19.
  6. World: England sets £10,000 fine for breaking self-isolation rules — The countries painting their pandemic recoveries green.

Biden to Senate GOP after RBG passing: "Please follow your conscience"

Joe Biden made a direct appeal to Senate Republicans in a speech addressing the passing of Supreme Court Justice Ruth Bader Ginsburg, urging them to "cool the flames that have been engulfing our country" by waiting to confirm her replacement until after the election.

The state of play: Senate Majority Leader Mitch McConnell said soon after the news of Ginsburg's death that President Trump's nominee would get a vote on the Senate floor.