Global equity fund inflows hit three-week high before late selloff

Global equity funds experienced their largest weekly inflows in three weeks through August 19, totaling $22.01 billion, according to LSEG Lipper data. This surge in investment activity came as investors anticipated a strong earnings season, with roughly 90% of MSCI World companies having reported second-quarter results, resulting in combined net income rising by 39.7% from a year earlier.

However, the inflows were followed by a broad late-week selloff, as higher government bond yields, elevated oil prices, and renewed inflation concerns began to weigh on equity valuations.

The United States saw the largest weekly inflow among regions, with equity funds attracting $11.72 billion, the biggest weekly gain since July 29. European and Asian equity funds also witnessed net purchases of $4.70 billion and $2.96 billion, respectively. Among sectoral funds, technology funds attracted $1.55 billion in inflows after a week of net outflows.

Investors also showed interest in precious metals, purchasing $536 million in gold and other precious-metals equity funds. However, the financial sector experienced selling pressure, with investors offloading $1.59 billion in financial-sector funds. Meanwhile, investors continued to net purchase bond funds for the 20th consecutive week, adding a net $15.42 billion.

They bought $4.49 billion in hard-currency bond funds, their largest weekly purchase since July 8, and also increased investments in short-term and government bond funds, with weekly net inflows of $3.32 billion and $1.99 billion, respectively. In commodities, gold and other precious-metals funds attracted $2.04 billion, extending their inflow streak to six weeks.