Equities have finally returned to favour despite the Fed's recent stimulus tapering fears, according to the latest note by Goldman Sachs. Since the start of June, it states that $50 billion has flowed out of bond mutual funds and ETFs, whilst $30 billion has flowed into domestic equity funds in the US. This reflects the strong run of equity markets in recent times, with bonds posting poor or negative returns. Furthermore, retail equity allocation is now overweight when compared to the 20-year average of 68.4%. Goldman estimates that this is now at 69%, with its own Rotation Index showing a striking risk on rotation into equities and away from bonds. (VIEW LINK)
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