Key facts
- Global money market funds attracted $46.1 billion in the week ending September 2.
- Escalating U.S.-Iran tensions and a global bond selloff drove the inflows.
- Brent crude oil prices reached a 1-1/2-month high of $97.62 per barrel.
- Global equity funds saw net inflows of $6.65 billion, with U.S. equity funds experiencing outflows.
- Gold and precious metals funds attracted $2.85 billion, while energy funds saw outflows.
Global money market funds experienced their largest weekly inflows in nearly a month, with investors adding a net $46.1 billion in the week through September 2. This shift towards cash and shorter-duration debt was driven by escalating tensions between the U.S. and Iran, which saw Brent crude climb to a 1-1/2-month high of $97.62 a barrel, and a selloff in global bonds.
Concerns about inflation resurfaced following comments from Federal Reserve official Kevin Warsh, who suggested the central bank would need to take further action if it lacked confidence in inflation returning to its 2% target. This sentiment contributed to a cautious investor stance.
In contrast to the move into money market funds, global equity funds attracted net inflows of $6.65 billion, reversing the previous week's outflows. European and Asian equity funds saw significant inflows, while U.S. equity funds experienced substantial withdrawals. Sectoral funds, including technology, financial, and industrial funds, recorded net outflows.
Global bond funds saw their inflows cool to a five-week low, though short-term bond funds performed well. Gold and other precious metals funds continued to be a popular safe-haven asset, attracting inflows for an eighth consecutive week, while energy funds posted outflows for the third week in a row. Emerging markets saw continued buying in both equity and bond funds.