Welcome to Thoughts on the Market.
I'm Serena Tang, Morgan Stanley's Chief Cross-Asset Strategist.
Today, I'm going to look at how investors are playing defense amid elevated macro uncertainty.
It's Tuesday, April 22nd at 10 a.m. in New York.
So the last three weeks have brought intense volatility to global markets,
and investors have had to re-examine their relationship with risk.
Typically in times like these,
mutual fund and ETF flows from stocks into bonds serve as a clear gauge of investor defensiveness.
But this pattern hasn't really been informative this time around.
Instead,
flows to gold rather than bonds have been the clearest evidence of flight to quality most recently.
Between April 3rd and 11th, Almost 5 billion US dollars went into gold ETFs globally,
one of the strongest seven-day net flow stretches ever.
There has been 22 billion of net inflows to gold ETFs,
with assets under management totaling about 250 billion year-to-date.
Of the 10 days of the highest net inflows to gold ETFs over the last 20 years,
three occurred in the last month.
Cash also benefited from the Dash 2 defensives,
with over $100 billion flowing into money market funds year-to-date.
And we expect that reallocating to cash will be a theme for the rest of the year for many reasons.