Global equity funds draw inflows for second week as AI optimism holds

Global equity funds received net inflows of $34.76 billion for the second consecutive week, driven by optimism surrounding AI investments and reduced US inflation. The week saw a decrease from the previous week's $44.31 billion. Micron Technology reported quarterly revenue above forecasts, indicating robust demand for memory chips in AI applications.

Goldman Sachs also highlighted that leading US hyperscalers are set to spend $800 billion on capital expenditures in 2026, with expectations to rise to $1.1 trillion in 2027, fueled by strong revenue backlogs and a supply-constrained environment. The Federal Reserve's rate hike concerns diminished after a softer US inflation report in August, with July price pressures reported more moderate than initially expected.

European and Asian equity funds experienced inflows of $6.19 billion and $6.16 billion, respectively, while sectoral funds saw net outflows of $919.7 million, particularly in technology funds after a three-week buying spree. Global bond funds attracted $4.76 billion in inflows, a slight decrease from the previous week's $9.24 billion.

Short-term and government bond funds continued to see significant inflows of $5.43 billion and $4.13 billion, while high-yield bond funds experienced outflows of $2.29 billion. Money market funds registered net outflows of $116.52 billion, the highest weekly withdrawal since April 15. Among commodities, gold and precious-metals funds saw the smallest inflow in three weeks, while energy funds experienced net outflows of $559 million.

In emerging markets, equity funds recorded outflows of $1.37 billion for the fourth consecutive week, and bond funds saw a net withdrawal of $1.75 billion.