Investors load up cash, bonds as COVID-19 worries come back

LONDON (Reuters) - Investors piled on more cash, loaded $15.8 billion(12.95 billion pounds) in bonds and dumped equities this week, BofA said on Friday, amid worries about a second wave of coronavirus infections and a longer strain to the global economy from lockdowns.

Data for the week to Wednesday showed investors added $35.6 billion to money market funds, taking the year-to-date count to a whopping $1.2 trillion.

Equity funds, meanwhile, saw outflows of $6.2 billion, dragged down by "chunky" outflows from emerging markets, BofA's number crunching showed. Emerging markets saw a 13th week of outflows, with $5.6 billion leaving the funds in the latest week.

As expectations of deeper economic pain from the coronavirus lockdowns grew, investors were expecting the U.S. Federal Reserve to join the euro zone and Japan in the negative interest rate club.

Last week, for the first time ever, Fed funds futures began reflecting a small chance that negative rate policy would find its way to U.S. shores.

BofA, however, said negative U.S. interest rates could lead to a "retest of stock lows".

(Reporting by Thyagaraju Adinarayan; Editing by Alex Richardson)