Net inflows into global equity funds, driven by expectations for corporate earnings, came under selling pressure toward the weekend as investors shifted funds into bonds. Total inflows were approximately $22 billion.
In the week through 19 August, global equity funds recorded their largest inflows in the past 3 weeks. Investors had expected strong second-quarter corporate earnings, but sentiment deteriorated toward the weekend as new inflation risks, including rising government bond yields and higher oil prices, came into focus. Net inflows into global equity funds reached $22.01 billion, the highest weekly level since 29 July.
By region, U.S. equity funds attracted the largest inflows, while European and Asian equity funds also recorded net inflows for the week. By sector, renewed buying of technology stocks was notable, and demand for gold and precious-metals funds continued, while financial-sector funds saw outflows.
Bond funds recorded net inflows for the 20th consecutive week, attracting $15.42 billion during the period. Against a backdrop of interest-rate movements, money market funds recorded inflows at their lowest level in 3 weeks, while commodity funds attracted $2.04 billion into gold and other precious metals. Emerging-market asset funds continued to attract inflows, with money flowing into emerging-market equity and bond funds, respectively.
Thus, while strong corporate earnings supported inflows into global equity funds, rising bond yields and higher oil prices toward the weekend created a market environment in which interest in risk assets and demand for safe-haven assets once again intersected.