We often write about Fund Managers, Private Equity, Superannuation Funds etc being awash with cash, the chart below illustrates this point perfectly as an precedented amount of money has flowed into global equity funds through 2021, its not surprising there’s been an absence of any meaningful selling in equities. To put these inflows into perspective since November there’s been a phenomenal $837bn flow into equity funds over just 40-weeks and I’m sure plenty of this money continues to struggle to find a home as professionals remain scarred to buy the top.
MM can actually see volatility rising over the next 1-2 months as bond yields rally and these inflows plateau and potentially fall depending on the speed of the move in bonds but again the remaining cash on the sidelines is likely to step up and buy dips, just as has been the nature of this rally from the March 2020 low.
