Fund investors spent the last week pricing in a Trump victory

Donald Trump reacts during a campaign event in Selma, North Carolina, November 3, 2016.
Carlo Allegri | Reuters

Money flowed into government bonds and European stocks, and out of high-yield bonds and U.S. stocks, as the market positioned the last week for the possibility that Donald Trump might pull off a win in Tuesday's presidential election.

There were multiple signs that fund investors were making adjustments — either pricing in or hedging against a Trump win — as the Republican sharply narrowed the gap with Democratic nominee Hillary Clinton. The Real Clear Politics polling average Friday gave Clinton just a 1.7-point lead over Trump, down from 7.1 points on Oct. 18.

Government bonds saw their first inflows in 17 weeks, high-yield redemptions hit their highest level since January and gold took in cash as well, according to Bank of America Merrill Lynch.

All of the trades are consistent with what many on Wall Street have been looking for should Trump prevail: At least a short-term sell-off in the stock market, inflation pressures pushing up bond yields and a general climate of uncertainty that will benefit safe haven plays like Treasurys and precious metals.

Election jitters persist as Wall Street tries to brake slide
Election jitters persist as Wall Street tries to brake slide

"With the markets and the media not prepared for such an outcome, a Trump win will still most likely unleash a flight-to-quality rally amid global risk-off, with (Treasury prices) rallying sharply as a safe haven trade," George Goncalves, head of U.S. interest rate strategy at Nomura, said in a client note.

In addition to the other moves, the U.S. dollar's continued strength against the Mexican peso has "gone a long way toward pricing in a surprise Trump victory next week," Michael Hartnett, chief investment strategist at BofAML, said in a note.

The flows come at a time when the has turned in its longest losing streak since the financial crisis and is down 3.6 percent since the beginning of October.

Goncalves noted that some of the early Trump reaction likely would fade if he were elected, as the focus turned to his plans to cut corporate taxes and other pro-growth moves. His pledge to slap tariffs on countries viewed as currency manipulators and using unfair trading practices, along with his steep tax cuts that would add to the national debt, are both seen as inflationary and therefore not bond-friendly.

Bonds overall saw $1.1 billion in outflows, the biggest number in 18 weeks. The redemptions were concentrated, though, in riskier bonds, with just shy of $4 billion flow out of high-yield bond funds. Government bonds saw $1.85 billion in inflows.

Commodities in general saw a big boost, taking in $1.4 billion for the biggest inflows in 13 weeks. Money also found its way into European equities for the first time in 39 weeks, to the tune of $83 million. Outflows from U.S. equities amounted to $3.5 billion, bringing the yearly total for redemptions to $162.1 billion, according to BofAML.