Global equity funds attracted $22.01 billion in net inflows in the week through August 19, marking their strongest weekly inflow in three weeks as investors positioned for a solid earnings season.

However, the fund-flow data came before a broad late-week selloff, as rising bond yields, elevated oil prices, and renewed inflation concerns began to weigh on equity valuations.

Strong Earnings Remain a Key Driver

According to LSEG data, around 90% of MSCI World companies had reported second-quarter results, with combined net income rising 39.7% year over year.

Optimism around AI also continued to support market sentiment. Investors are now waiting for Nvidia’s earnings next week for further clues on demand for AI infrastructure and data-center spending.

Equity Inflows Rise Across Major Regions

The U.S. led global equity inflows:

• U.S. equity funds: +$11.72 billion

• European equity funds: +$4.70 billion

• Asian equity funds: +$2.96 billion

Among sectors, technology funds attracted around $1.55 billion after posting net outflows the previous week.

By contrast, financial-sector funds saw around $1.59 billion in outflows, showing that investors remained selective rather than broadly increasing risk exposure.

Bonds and Gold Continue to Attract Capital

Bond funds recorded net inflows for a 20th consecutive week, attracting around $15.42 billion.

Notable flows included:

• Hard-currency bond funds: +$4.49 billion

• Short-term bond funds: +$3.32 billion

• Government bond funds: +$1.99 billion

Meanwhile, gold and other precious-metals funds attracted another $2.04 billion, extending their inflow streak to six consecutive weeks.

Energy funds, however, posted $146 million in outflows, reversing the previous week’s inflows.

Emerging Markets Remain in Demand

Emerging-market equity funds attracted $1.57 billion, marking a sixth straight week of inflows.

Emerging-market bond funds also saw $493 million in net inflows, extending their positive streak to three consecutive weeks.

Conclusion

The fund-flow data show that investors are still backing corporate earnings, technology, and selected equity markets, while also allocating capital to bonds and gold as a way to manage risk.

However, the late-week selloff suggests that sentiment has become more cautious after the reporting cutoff.

In the near term, markets are likely to remain sensitive to bond yields, oil prices, inflation, and earnings from major technology companies, especially Nvidia.

This article is for informational and market analysis purposes only and does not constitute investment advice.

Source: Reuters