Global money market funds attracted over $20 billion for three consecutive weeks, while demand for equity funds cooled down
Global money market funds have attracted continuous inflows for three weeks, with a net inflow of $24.55 billion in the latest week, mainly due to the easing of rate cut expectations by the Federal Reserve and caution regarding the situation in the Middle East. Asian money market funds saw an inflow of $12.88 billion, reaching a new high for the year. In contrast, demand for stock funds cooled down, with a net purchase of only $3.65 billion. Overseas Chinese stock funds attracted $8.52 billion, marking the largest single-week inflow since December 2020. Global bond funds also continued to attract investments, with a net inflow of $12.43 billion
According to Zhitong Finance, global investors significantly invested in money market funds in the week ending October 9th, as expectations of a Fed rate cut receded and caution remained over the Middle East conflict. Investors also allocated funds to more liquid money market funds, awaiting the Chinese government's highly anticipated latest stimulus measures to be announced this weekend. Based on LSEG data, global money market funds saw a net inflow of $24.55 billion this week, compared to around $22.78 billion in the previous week.
After the stronger-than-expected US non-farm payrolls report released last week, investors adjusted their views on future Fed rate cuts, boosting demand for low-risk assets. Money market funds in Asia saw an inflow of $12.88 billion, the highest level since January 10th. Funds in Europe and the US also saw net purchases of $7.78 billion and $2.54 billion respectively.
However, demand for higher-risk equity funds cooled off, with investors only buying $3.65 billion in global equity funds, compared to a net purchase of $35.97 billion in the previous week.
Technology, financial, metal, and mining sector funds received significant inflows of $0.572 billion, $0.417 billion, and $0.148 billion respectively, while the healthcare sector fund had a net sales of $0.52 billion.
Overseas Chinese stock funds attracted a massive $8.52 billion in funds, the largest single-week inflow since at least December 2020.
Global bond funds attracted investments for the 42nd consecutive week, with investors injecting $12.43 billion into these funds. Investors net bought $2.16 billion in short-term bond funds, compared to a net sell-off of $3.3 billion a week ago. Meanwhile, government funds, high-yield funds, and loan participation funds saw net inflows of $1.96 billion, $0.906 billion, and $0.737 billion respectively Gold and other precious metal funds have remained attractive for the ninth consecutive week, attracting approximately $780 million in fund inflows. However, energy funds saw outflows of $11 million.
Data covering 29,545 emerging market funds shows that equity funds attracted a massive $8.55 billion, the largest amount since January 2021. Investors also purchased $1.76 billion in bond funds.
