By Saikat Chatterjee

LONDON (Reuters) -Global equity funds saw their first outflows in 2021 as rising pessimism about U.S. President Joe Biden’s spending plans triggered large outflows, while cash, government, debt and gold saw heavy inflows, a weekly round-up by BofA showed on Friday.

U.S. stock are expected to record a third year in double-digit gains, however markets remain sluggish due to the growing chorus of hawkish central banking and problems at China Evergrande Group.

BofA reported that global stock funds experienced the largest outflows in 20 years, at $24.2 billion. Investors shifted to cash and ploughed $39.6 billion into funds. Ten billion dollars were inflows into bond funds.

Analysts led by Michael Hartnett, the chief investment strategist, noted that $10 billion was inflow into bond funds.

Recently, concerns have increased that central banks may gradually withdraw their stimulus programs from the pandemic-era. BoFA strategists stated that only $100 million will be added to global market liquidity by 2022’s second-half. This is a drastic drop in the $3.1 trillion of this year.

Worse, the equity markets are showing signs of fatigue. BofA stated that while fund inflows are almost in line with equity prices, inflows have increased by over 90% in 2021, and equity prices only risen by 12%.

Global equity markets have been stuck in elevated holding patterns since April 2021. Tech funds, however, saw their first outflows on June 2021.