(Bloomberg) — Investors can’t exit European stocks fast enough, with the region experiencing another week of record outflows as the war in Ukraine rages on, according to Bank of America Corp. strategists.
European equity funds lost $13.5 billion in the period to March 9, double the record set in the previous week, the strategists wrote, citing EPFR Global data.
It’s “no to Europe,” said strategists led by Michael Hartnett, with the continent the only major region where investors reduced their holdings. They bought U.S., Japan and emerging-market stocks, with Wall Street attracting the strongest inflows in four weeks at $8.8 billion.
European stocks had entered 2022 as the most overweight region globally, but the war in Ukraine has triggered a fast unwind of this exposure by investors. The region’s dependence on Russian energy exports has raised fears that the European economy will be more affected than the rest of the world by the conflict.
Among sectors, the clearest consensus exit among investors was financial stocks, which has now accumulated its largest three-week outflows since March 2020 at $7.5 billion.
What did investors buy last week? “The old economy,” Hartnett said, pointing to the record $5.6 billion of inflows into materials stocks. Gold was also in favor, drawing the largest inflow since July 2020 at $2.4 billion, as “an alternative to Bitcoin,” he added.
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