Much has been made of the flows into U.S. equities this month. Funds have rolled out the red carpet for a record $11.3 billion or so in net inflows over the first two weeks of the year, more when you factor in ETFs.
Just to cool the enthusiasm a little, it’s worth remembering that this comes after a torrid 2012.
Our graphic detailing Lipper’s latest estimated net flows in and out of various fund sectors shows combined outflows from U.S. equity funds and U.S. small cap funds reached a total of more than $150 billion last year. The fourth quarter alone contributed more than $50 billion of that.
To make the point more forcefully, those 12-month net outflows from the two sectors are far in excess of the rest of the top 25 worst-hit fund sectors combined.
So there’s a fair deal of ground to catch up, and just as it makes recent inflows seem less gargantuan, that yawning gap can also be seen as succour to the bull case for equities in the U.S. and beyond (a bull case which now includes — oxymoron ahoy — permabears among its adherents).