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You'd be forgiven for thinking the worst two-quarter period for stock markets since 2009 had investors running for the hills — but you'd be wrong.

One of the most startling statistics from the torrid first half of 2022 is that investors bought a net $195 billion of stocks even as major U.S. and global equity indices lost almost a fifth of their value in the face of rising inflation, interest rates and recession fears.

According to mutual fund data tracked by Bank of America, the big "capitulation" to date all came in bonds as fixed-income funds saw a net $193 billion head for exits in the year through June 22.

At first glance, it looks like investors bought the considerable dip, wisely or not. Closer inspection shows the demand was heavily frontloaded in the year and waned over the past three months.

For many investors, it was just for want of an alternative, as inflation and rate rises whacked cash and bonds returns hard.

A belief that stocks perform better in periods of high inflation was perhaps part of it. And correlated losses in both stocks and bonds undermined the latter's traditional hedge in balanced portfolios and likely stoked heavy overweighting of equity.

What's clear from the same set of fund stats is that the net buying was all in passive Exchange Traded Funds, which attracted a $320 billion — while so-called "long-only" funds saw net outflows to the tune of $126 billion.

A big question now is whether the second half of the year sees asset allocation flipped. Recession worries will likely replace inflation as the dominant narrative and the search for peak interest rates may rebalance the savings mix back to bonds.

If so, that "capitulation" in bonds and cash in the first half may just switch to equities as earnings forecasts finally reflect the slowdown ahead.

According to Refinitiv Lipper data, U.S. government bond ETFs are already on course to receive the biggest quarterly inflow in eight years.

Higher bond yields certainly make expected returns on traditional 60/40 equity/bond portfolios more attractive for long-term investors and will put pressure to reduce extreme equity skews.

What's more, Schroders strategists point out that the risk reduction provided by 60/40 funds comes mostly from the lower volatility of bonds rather than their negative correlation per se — with equity portfolios twice as volatile historically.

Dolan is editor-at-large for finance and markets at Reuters.