Global Equity Fund Inflows Slow Amid Concerns Over Fed Independence

Global equity funds experienced a decline in inflows during the week ending August 27, driven by concerns regarding the independence of the Federal Reserve. This shift in investor sentiment coincided with actions taken by President Donald Trump, who sought to dismiss a Federal Reserve governor. According to data from LSEG Lipper, global equity funds attracted only $2.96 billion in inflows, marking the lowest level since the week of August 6, when the funds saw a significant outflow of $7.64 billion.

European equity funds recorded a net inflow of $876 million, a stark contrast to the previous week’s inflows of approximately $9.88 billion. In the U.S. and Asia, equity funds gained net inflows of $571 million and $649 million, respectively. Notably, equity funds focused on the financial sector experienced a notable surge, attracting a net of $1.52 billion, the highest weekly inflow in eight months.

While equity funds faced challenges, demand for global bond funds remained robust for the nineteenth consecutive week. These bond funds garnered net inflows of $14.42 billion during the same week. The short-term bond fund segment was particularly appealing, bringing in $2.59 billion in inflows for the ninth week in a row. Additionally, euro-denominated bond funds and corporate bond funds saw substantial inflows of $2.37 billion and $1.77 billion, respectively.

Conversely, money market funds experienced a turnaround, with a net outflow of $17.57 billion, ending a three-week trend of net purchases. In the commodities sector, gold and precious metals funds attracted a renewed interest, recording a net inflow of $715 million after a previous outflow of $293 million.

Emerging markets showed mixed results as investors withdrew $310 million from equity funds, marking the third week of outflows in four weeks. However, there was a notable interest in bond funds, with net purchases amounting to $985 million. This data reflects trends across a combined total of 29,693 funds, highlighting significant shifts in investor behavior amid ongoing economic concerns.