Key facts
- Global equity funds attracted $34.76 billion in net inflows for the week ending September 30.
- Investor demand for stocks was driven by optimism around AI spending and softer U.S. inflation data.
- US equity funds saw net purchases of $20.6 billion.
- Technology funds experienced outflows of $2.63 billion.
- Money market funds saw their largest weekly withdrawal since April 15, totaling $116.52 billion.
Global equity funds experienced net inflows of $34.76 billion for the week ending September 30, marking the second consecutive week of positive investor sentiment towards stocks. This trend was bolstered by continued optimism surrounding investments in artificial intelligence and a less-than-expected rise in U.S. inflation for August.
According to data from LSEG Lipper, the inflows were down from $44.31 billion in the prior week. The positive risk appetite was significantly influenced by expectations of robust AI spending. Micron Technology's forecast for quarterly revenue exceeding estimates signaled strong demand for memory chips crucial for AI applications. Goldman Sachs projected that major U.S. cloud providers, known as hyperscalers, are poised to spend approximately $800 billion on capital expenditures in 2026, with consensus estimates rising to $1.1 trillion in 2027. The bank noted that strong revenue backlogs and a supply-constrained market continue to fuel investment, while cloud revenue growth among key players has accelerated this year.
Meanwhile, a Commerce Department report indicated that U.S. inflation rose less than anticipated in August, and July price pressures were revised downward, diminishing the immediate need for the Federal Reserve to increase interest rates further in October.
Investors allocated a net $20.6 billion to U.S. equity funds for the second week in a row. European and Asian equity funds also saw positive flows, with $6.19 billion and $6.16 billion, respectively.
However, sectoral funds experienced net outflows totaling $919.7 million. Investors withdrew $2.63 billion from technology funds after a three-week buying spree, while financial and utility funds attracted $1.13 billion and $468 million, respectively.
Global bond funds attracted $4.76 billion in inflows, a decrease from $9.24 billion in the previous week. Short-term and government bond funds saw substantial inflows of $5.43 billion and $4.13 billion, respectively. Conversely, high-yield bond funds experienced outflows of $2.29 billion.
Money market funds recorded net outflows of $116.52 billion, the largest weekly withdrawal since April 15.
Among commodity funds, gold and precious-metals funds garnered $275.2 million in net purchases, the smallest inflow in three weeks. Energy funds saw net outflows of $559 million.
In emerging markets, equity funds recorded outflows of $1.37 billion for the fourth consecutive week, and investors withdrew a net $1.75 billion from bond funds.