Global equity fund inflows fell sharply last week as investors shifted to risk-off sentiment on concerns over overvalued tech sector valuations and signs of weakness in the U.S. labor market. Investors bought just $4.11 billion in equity funds, down from more than $22 billion the previous week.
Private reports showing potential U.S. job losses in October, amid a lack of official data due to the government shutdown, also dampened risk appetite. A sell-off in major tech stocks and SoftBank’s $5.83 billion sale of Nvidia shares added to the pressure on the tech sector.
Asia continued to attract investors with inflows of $3.04 billion, followed by U.S. funds with $1.15 billion. In contrast, European funds saw outflows of nearly $2 billion. The tech sector continued to see buying but at its lowest level in four weeks, while healthcare and industrials saw modest inflows.
Global bond funds showed stronger momentum with 30 consecutive weeks of inflows, led by short-term bond funds which posted a seven-week high. European and corporate bond funds also saw significant inflows.
In commodities, gold and precious metals funds rebounded after two weeks of outflows. Emerging markets saw equities receive inflows for a third consecutive week, while bond funds experienced a third consecutive outflow, indicating a shift in investor risk appetite.
