Key facts
- Global equity funds attracted $49.23 billion in the week to July 8.
- This is the largest weekly inflow for equity funds in three weeks.
- Strong demand for AI-linked technology products and reduced expectations for Fed rate hikes boosted investor sentiment.
- The technology sector garnered $11.49 billion in inflows.
- U.S. equity funds led regional inflows with $24.97 billion.
Global equity funds experienced their largest weekly inflow in three weeks, reaching $49.23 billion in the week ending July 8. This surge in investment was driven by strong investor demand for artificial intelligence-related technology products and a decrease in expectations for Federal Reserve interest rate hikes, which collectively boosted risk appetite.
Data from LSEG Lipper indicated that the $49.23 billion inflow was the largest weekly sum since June 17. Recent upbeat manufacturing activity reports for June highlighted robust demand for AI-linked products, including semiconductors and computers. Furthermore, anticipated strong earnings from the AI sector contributed positively to market sentiment, with the technology sector projected to achieve 54.2% year-on-year growth in net income for the second quarter, according to LSEG data based on analyst estimates.
Regionally, U.S. equity funds attracted the largest share with $24.97 billion, marking their highest inflow in three weeks. European and Asian funds also saw significant interest, drawing $13.67 billion and $6.95 billion, respectively.
The technology sector was a particular focus, attracting $11.49 billion in inflows, a notable increase of over a quarter from the $8.88 billion recorded the previous week. Funds focused on financials and industrials also experienced substantial inflows, amounting to $1.52 billion and $789 million, respectively.
In parallel, global bond funds recorded their largest weekly inflows since at least 2019, totaling $31.34 billion. This included substantial investments in short-term bond funds ($7.19 billion), euro-denominated bond funds ($3.87 billion), corporate bond funds ($2.92 billion), and government bond funds ($2.73 billion).
Investors also heavily allocated capital to money market funds, with inflows reaching $83.76 billion, the largest weekly net purchase since June 3. Conversely, gold and other precious metals commodity funds experienced their eighth consecutive weekly outflow, totaling $372 million. Emerging-market equity funds continued their trend of outflows for an eleventh consecutive week, losing approximately $500 million, although emerging-market bond funds still saw inflows of $1.66 billion.