Global equity fund flows have sharply declined amidst rising political and economic risks.
During the week ending October 8, global equity funds witnessed a significant drop in new investment activity, as markets adopted a cautious stance due to escalating political tensions in France and the ongoing government shutdown crisis in the United States.
According to data from LSEG Lipper reported by Reuters, purchases by investors in global equity funds amounted to only $2.03 billion, compared to approximately $48.8 billion in the previous week, marking a steep decline of nearly 96%.
Despite this noticeable slowdown, European equity funds managed to maintain some momentum, attracting positive flows of $7.02 billion, while U.S. and Asian funds experienced substantial capital outflows of $4.52 billion and $1.27 billion, respectively.
Sector-wise, technology, industrials, and healthcare remained the most appealing to investors, with net inflows of $2.03 billion, $1.25 billion, and $1.23 billion, respectively, reflecting continued confidence in high-growth defensive sectors.
Conversely, global bond funds continued to draw strong liquidity, recording a weekly increase of $25.81 billion, the largest in nearly five years. Additionally, cash market funds attracted new investments of approximately $64.45 billion.
Gold also reflected this trend, as precious metals funds maintained their attractiveness for the nineteenth week in the past twenty weeks, with net inflows of $1.34 billion, indicating ongoing investor preference for safe-haven assets amid global uncertainty.
