Key facts
- Global equity funds attracted $49.23 billion in the week to July 8, the largest inflow in three weeks.
- Investor demand was boosted by strong interest in AI-linked technology products and reduced expectations for Federal Reserve rate hikes.
- U.S. equity funds led regional inflows with $24.97 billion.
- The technology sector attracted $9.71 billion in inflows.
- Global bond funds saw their largest weekly inflows since at least 2019, totaling $31.34 billion.
- Money market funds experienced inflows of $3.91 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 40.8% 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. Technology sector funds saw investors pump a net $9.71 billion, marking their largest weekly net purchase since June 16. Financials and consumer staples funds also drew inflows of $1.04 billion and $683 million, respectively.
In parallel, global bond funds recorded their largest weekly inflows since at least 2019, totaling $16.82 billion. This included substantial investments in short-to-intermediate investment-grade funds ($5.87 billion), general domestic taxable fixed income funds ($2.87 billion), and municipal debt funds ($1.38 billion).
Investors also heavily allocated capital to money market funds, with inflows reaching $3.91 billion, marking a second successive weekly net purchase.