By Reuters Staff

       2 Min Read

       FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 12, 2021. REUTERS/Brendan McDermid

       LONDON (Reuters) - Investors’ interest in equity markets continued unabated in the latest week, with U.S. and Japanese stock market fund flows accelerating to multi-week highs at the expense of investment in fixed income funds, BofA said on Friday.

       While global equity funds attracted $18.7 billion in the week to Wednesday, U.S.-focused ones took in $9 billion for their largest inflows in four weeks. Flows to Japanese stocks were the biggest in eight weeks at $1.5 billion, BofA said, analysing data from EPFR.

       Meanwhile fixed income inflows shrank to $5.6 billion, their smallest since March, with high-yield bond funds suffering the biggest outflows in eight weeks at $2.3 billion in the period that saw U.S. inflation data come in above expectations.

       “H1 inflation to H2 stagflation = defensives outperform,” noted BofA’s Michael Hartnett in a note to clients, adding this was the “summer ‘flight-to-quality’ as yield curve flattening crushes reflation trades.

       Gold funds enjoyed first inflow in four weeks at $200 million over the period, while investors pulled $30.3 billion from cash.

       Reporting by Karin Strohecker; Editing by Saikat Chatterjee

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