BofA Investment Bank: Investors have poured $508 billion into cash in the first quarter, the most since the pandemic, the largest quarterly increase in cash holdings since 2001.
Our analysis shows that the increase in cash holdings is likely due to investors’ concerns about market volatility and uncertainty about the recovery of the global economy and that this shift towards cash has occurred across all types of investors, including institutional and retail investors. However, investors may still be hesitant to accept risk and may choose safer investments instead.
Of course, it should be noted that this increase in cash assets may not be a cause for concern; Because it may provide flexibility for investors to take advantage of potential investment opportunities in the future. Additionally, while a shift toward cash may be a sign of investor caution, it may not necessarily indicate a lack of confidence in the market or the economy.