Global investors pulled $70 billion from equity funds in the week through May 27, the first withdrawal in nine weeks, as a broad risk-off rotation swept across asset classes.
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Global equity funds post $70b outflow, first in nine weeks
Global equity funds saw $70 billion in outflows during the week through May 27, the first withdrawal in nine weeks, Bank of America said, citing EPFR Global data.
"The rotation from equities into bonds and cash suggests growing macro uncertainty," the bank's weekly fund flow report said, noting that investors were reducing exposure across risk assets.
Bond funds attracted $236 billion in inflows, while money market funds drew $219 billion, reflecting demand for safe-haven assets. Crypto funds lost $1.2 billion and gold saw $1 billion in outflows, confirming the breadth of the de-risking. Japanese equities suffered their largest outflow since May 2025 at $8.2 billion, making the region the hardest hit.
The broad rotation signals that investors are bracing for sustained macro headwinds, with the shift into cash and bonds reflecting demand for yield and capital preservation. Infrastructure was a rare bright spot, drawing $800 million in inflows and bringing cumulative inflows since April 2025 to $24 billion.
The outflows came as the S&P 500 extended its winning streak to eight consecutive weeks through May 23, the longest since 2023, even as the equity rotation gathered pace beneath the surface. The divergence between index-level gains and fund flow data suggests institutional investors were reducing exposure while passive flows and short covering supported headline levels.
Japan's $8.2 billion outflow stood out as the largest since May 2025, coinciding with the Nikkei 225's surge past 65,000 for the first time on May 25 amid optimism over a potential US-Iran peace deal. The outflow suggests investors used the rally to reduce positions rather than add new exposure.
The rotation into bonds and cash mirrors a pattern seen in prior periods of geopolitical uncertainty, when investors prioritize liquidity and yield over equity risk premiums. The $236 billion flowing into bond funds represents one of the largest weekly allocations on record, according to Bank of America's data series.
This article is for informational purposes only and does not constitute investment advice.
