In a research note the bank said a ‘massive’ $4.5bn flowed into China funds over the past week, largest weekly inflow since April 2008.
Much of this money has gone into the newly available A-shares ETFs.
China was very much the exception rather than the rule in emerging market flows generally, with virtually zero inflows into assets from other countries.
This BAML said, is indicative of a belief in the market that a bull run for Chinese equities will not be the precursor to Chinese economic growth which drives up emerging markets generally.
Other notable flows highlighted by BAML include the continuation of money coming into European equities funds, driven by ongoing dollar strengthening and the smallest weekly flows into investment grade bonds since January 2014.
‘Firming Fed hike expectations’ also prompted the highest weekly inflows into financial sector equity funds since last December as investors targeted bank stocks.
