Global equity funds extend inflow streak to six weeks, but momentum slows as AI trades cool

Global equity funds drew substantial inflows in the week ending October 28, though the pace of buying moderated.

According to data from LSEG-owned Lipper, investors made net purchases of US$10.19 billion in global equity funds during the week, marking a sixth consecutive week of net buying, yet the amount was below the prior week's US$25.06 billion.

As artificial intelligence (AI) and chip stocks rebounded, South Korea's SK Hynix led gains after reporting record quarterly profit, lifting demand for technology funds and Asian funds.

Still, the week's data showed some caution around AI trades as AI giants Alphabet (GOOGL.US), Microsoft (MSFT.US) and Amazon (AMZN.US) were about to report earnings.

By region, Asian equity funds led inflows, attracting US$9.90 billion in net buying, down from US$11.58 billion the previous week.

Investors allocated US$4.54 billion to European funds, while withdrawing a net US$6.65 billion from U.S. equity funds.

Among sector funds, investors put US$5.50 billion into technology, above the prior week's US$5.07 billion.

Industrial sector funds also attracted US$408 million in inflows, while utilities funds saw US$928 million in outflows.

Meanwhile, net inflows into global bond funds dropped to US$2.72 billion, the lowest in six weeks.

Specifically, global short-term bond funds saw US$2.67 billion in outflows for the week, the first net redemption since April 15.

Investors bought US$2.62 billion of government bond funds and US$1.01 billion of corporate bond funds, respectively.

Money market funds posted US$38.5 billion in net outflows, reversing the previous week's US$1.695 billion inflow.

In commodities, investors pulled US$1.51 billion from gold and other precious metals funds, the second weekly net redemption in the past seven weeks.

Energy funds, however, attracted US$177 million in inflows.

In emerging markets, data covering 29,184 emerging market funds showed equity funds drew investor favor for a third straight week, logging US$2.2 billion in net inflows.

Bond funds, though, saw US$1.85 billion in net redemptions, the largest weekly outflow since the week ending September 30.