The recent gains in the stock markets, which has seen the S&P 500 clock gains of 27 percent year-to-date, could push even higher, according to research firm TrimTabs, who see investors continuing to ditch bonds for equities.
The U.S.-based company, which analyses data from U.S. equity mutual funds and exchange-traded funds (ETFs), said in a report released on Sunday that sentiment remained "positive" for the intermediate term with demand indicators suggesting that "the U.S. stock market uptrend has plenty of life left in it."
"We advise investors and traders with a longer-term outlook to keep buying any dips, " TrimTabs Chief Executive David Santschi said in the report.
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The data also suggests that a "great rotation" out of bonds and into equities has started, he added, with investors shunning savings deposits and opting to instead for equity funds.
"Many market strategists have long anticipated a 'great rotation' into equities from cash and fixed income. The latest data suggests such a rotation is finally getting underway. Not only are bond fund outflows accompanying equity fund inflows, but inflows into savings deposits are declining," Santschi said
Talk of a shift away from bonds into equities started in earnest in January. Analysts cited the U.S. Federal Reserve's bond-buying program as the reason for the equity rally, with record-low interest rates on Treasurys pushing some investors into riskier assets - like equities - in search of a higher yield.