Global investors poured into money market and government bond funds in the week to August 14, preferring to stick with lower-risk assets while waiting for more clarity on the health of the U.S. economy.
According to LSEG data, investors purchased a net $14.24 billion in global money market funds during the week, adding to the $97 billion bought over the previous seven days. Government bond funds attracted $2.6 billion for a 15th consecutive weekly net inflow.
A disappointing U.S. jobs report and manufacturing data had sparked concerns about the possibility of a U.S. recession and triggered last week’s global stock market rout.
But since then, benign U.S. inflation figures and surprisingly strong retail sales have seen equities pick up again.
Riskier equity funds reversed a downward trend, gaining about $857 million in net inflows in the week to Aug. 14, after losing a substantial net of $4.56 billion the previous week.
European funds attracted $6.57 billion in net purchases after two weeks of outflows, while Asian funds drew a net $2.09 billion. However, U.S. funds saw a net outflow of $8.92 billion.
Investors allocated a net $938 million and $850 million into the tech and utilities sectors, respectively, but withdrew $426 million from consumer discretionary funds.
Global bond funds secured a net $4.04 billion inflow, marking a 34th consecutive week of net purchases, sterling-denominated global bond funds attracted $2.34 billion, the highest since at least November 2020. Corporate and loan participation funds saw net outflows of $3.85 billion and $653 million, respectively.
In commodities, energy funds saw net outflows of $193 million following five weeks of inflows, while precious metal funds flipped to a net purchase of $645 million from net selling of $713 million the previous week.
Data covering 29,578 emerging market funds showed a net outflow of $1.21 billion from equity funds, continuing a 10-week trend, while bond funds drew net purchases of $92 million.
(Source: ReutersReuters)
