Bank of America’s latest The Flow Show says global investors are pushing deeper into a new asset rotation as expectations for further Federal Reserve tightening build and long-dated yields keep climbing. Cited by Trader-X, the report showed that in the week ended July 22, global equity funds took in $30.4 billion, bond funds added $14.9 billion, gold funds brought in $2 billion, and money market funds lost $33.9 billion.
The biggest destinations for fresh money were emerging markets, technology stocks, and commodities. BofA said investors remained cautious on U.S. domestic stocks and U.K. equities.
The bank’s Bull & Bear Indicator stayed at 9.6, which it classifies as an extreme bullish reading. A sell signal first triggered in May 2026 remains active. BofA strategist Michael Hartnett said strong inflows into tech are being offset by hedge funds building increasingly bearish positions in oil, 2-year Treasuries, and the VIX, leaving market sentiment at historically elevated levels and raising the risk of a deleveraging trigger in risk assets.
Emerging markets lead as China and South Korea post record inflows
Emerging markets were the clearest winners in the latest reallocation wave. Emerging-market equity funds drew $29.6 billion in a single week, the second-largest weekly inflow on record, and have now posted inflows for three straight weeks.
China equity funds took in $21.3 billion, the third-largest weekly inflow in history. South Korea equity funds added $1.5 billion for the week, while four-week inflows reached $16.3 billion, a record. In BofA’s year-to-date cross-asset return ranking, South Korean equities lead global stock markets with a gain of 79.6%.
BofA strategists also described Hong Kong property stocks as a “long-term buying opportunity.” They said the Hang Seng Hong Kong Property Index is now trading around levels seen 30 years ago, leaving limited downside. The report tied that view to a stabilizing financial backdrop in China, the long-run rise of Asian technology, and what it sees as a new bull market for emerging markets and real estate. On that basis, the bank said the sector could post significant gains in the second half of the 2020s.
BofA added that it would buy any pullback caused by Fed tightening or a Bank of Japan currency crisis.
Record flows into tech, but warning signs are building
Technology remains the main destination for institutional money. Over the past four weeks, tech funds absorbed $52.8 billion, the largest such total on record. Weekly inflows came to $4 billion. Financial-sector funds took in $1.5 billion in the latest week and $8.8 billion over the past four weeks, the largest four-week inflow since January 2022.
BofA also flagged a break in the broader cyclical story. The report said the “blue-collar semiconductor” index, which it uses as a leading indicator for the industrial cycle, has fallen 21% from its June peak. That move challenges the market’s broad “boom” narrative. At the same time, the MAGS ETF, used as a proxy for the “Magnificent Seven,” is trying to hold its 200-day moving average at $65.
If the boom trade reverses, BofA strategists said the preferred setup is long defensive sectors, high-dividend equities, and duration assets, while shorting banks, brokers, technology stocks, and industrials. The report noted that investors are now the most overweight industrial stocks since July 2021, while bank shares are also seeing heavy inflows.
Bond market sends a sharper warning as long-end yields rise
The bond market is carrying one of the report’s clearest caution signals. The 30-year U.S. Treasury yield rose to 5.2%, the highest since June 2007. The 30-year real yield climbed to 3%, the highest since November 2008. Prices of U.S. technology corporate bonds fell to a two-year low.
Even so, money is still moving into fixed income. Investment-grade bond funds have now recorded inflows for 16 straight weeks, including $5.9 billion in the latest week. Government and Treasury funds posted a fourth consecutive week of inflows, taking in $5.7 billion. Treasury Inflation-Protected Securities, or TIPS, have seen inflows for 25 straight weeks.
BofA said global central banks have delivered 23 rate hikes so far in 2026 and estimated that another 18 hikes will come before year-end. The implied probability of a Fed rate increase at the July 29 FOMC meeting has climbed to 38%, while markets have fully priced one hike at the Sept. 16 meeting.
The bank said tighter financial conditions are now having a bigger market impact than corporate earnings, and that a continued rise in long-end yields could become the trigger for deleveraging in risk assets. In that setup, BofA said a long U.S. dollar position is the best hedge against a hawkish Fed.
Gold and crypto funds rebound as commodities top the year-to-date ranking
Alternative assets are also seeing money come back. Gold funds pulled in $2 billion in the latest week, the biggest weekly inflow since April 2026. Crypto funds added $900 million, the largest weekly inflow in 11 weeks.
In year-to-date performance rankings, commodities lead all major asset classes with a gain of 57.7%. Brent crude is up 54.6%, WTI crude has gained 51.2%, and copper is up 10.9%. Gold, by contrast, is down 4.4% this year, while Bitcoin has fallen 24.8%.
BofA described the current path in gold and Bitcoin as “2026 bottoming.” Its macro explanation was that the U.S. government is still running a fiscal deficit of about $2 trillion and paying roughly $1 trillion a year in interest, even though tariff revenue reached $250 billion over the past 12 months. At the same time, stock supply is rising as companies with negative free cash flow cut back on buybacks, and bond supply is also expanding. The bank said those factors support the long-term case for both gold and Bitcoin.
The report also said that in the second half of the 2020s, bank stocks represented by BKX will outperform brokers and private equity, which it grouped under “Wall Street.”
Private clients move more defensively while cash stays near a low
BofA’s private-client allocation data points in a different direction from institutional flows. The bank said its private clients now hold $4.5 trillion in assets, with 65.6% in equities, 17.5% in bonds, and 9.6% in cash. That cash share has dropped back to the record low reached in May 2026.
ETF flow data over the past four weeks showed private clients buying municipal bonds, consumer staples, and healthcare, while selling materials, low-volatility factors, and Japanese equities. That stands in clear contrast with institutional demand for technology and emerging markets.
The subcomponents of BofA’s Bull & Bear Indicator also showed elevated positioning. Hedge fund positioning is in the 82nd percentile, equity flows in the 96th percentile, and fund manager survey positioning in the 100th percentile. BofA said all three qualify as extreme bullish readings.
Since 2002, the bank said, the sell signal has been triggered 17 times. After those signals, the ACWI index fell an average of 2% to 3% over the following two to three months, with the maximum drawdown reaching 15% to 20%. The signal’s accuracy rate is about 60%.