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Takeaway: As money continues to flow out of Equity ETFs, fixed income and defensive sectors like Utilities and Gold have been the primary beneficiary.

Are You Bullish? Fund Flows Paint A Bearish Picture For Equities - bear 2

Investors are voting with their feet... 

And the picture painted isn't pretty for equity bulls.

Here's fund flow analysis via our Macro team in a note sent to subscribers earlier this morning:

 

"Year-to-date stock ETF flows are -$31.6 billion redemption, which would be the worst year on record for the category through the beginning of our data set which starts in 2013. On the active management side, it’s worse - active equity mutual funds have lost over twice as much with withdrawals now totaling -$72.8 billion in 2016 – everyone is long equity beta through automated asset allocations – scary stuff!"

Take a look at the chart below which show net money flows to Equity (less Fixed Income) funds with detailed analysis from our Financials team:

 

"The net of total equity mutual fund and ETF flows against total bond mutual fund and ETF flows totaled a negative -$16.7 billion spread for the week (-$17.1 billion of total equity outflow net of the -$377 million outflow from fixed income; positive numbers imply greater money flow to stocks; negative numbers imply greater money flow to bonds). The 52-week moving average is -$3.0 billion (negative numbers imply more positive money flow to bonds for the week) with a 52-week high of +$20.2 billion (more positive money flow to equities) and a 52-week low of -$19.0 billion (negative numbers imply more positive money flow to bonds for the week.)"

Are You Bullish? Fund Flows Paint A Bearish Picture For Equities - ICI10 large 7 13

Meanwhile, massive year-to-date inflows continue to flood into our favorite Macro call like Utilities (XLU), Gold (GLD) and Long Bonds (TLT). Again, here's our commentary from our Financials team:

"Fixed income mutual funds also experienced withdrawals losing -$2.4 billion last week, however, bond products have averaged +$2.2 billion in new funds per week on the active fund side with fixed income ETFs raising +$1.5 billion per week thus far in '16. Finally, defensive investors shored up +$15 billion of cash in money market funds last week as summer risk aversion picked up."

 

Below is the sector and asset class weekly and year-to-date ETF breakdown:

 

Are You Bullish? Fund Flows Paint A Bearish Picture For Equities - ICI9 large 7 13

All things considered, with equity markets tapping all-time highs, its worth asking:

Are you bullish?