Global equity fund inflows hit $27.2 billion three-week high

Investors treated the AI-driven pullback as a buying opportunity, pouring $27.21 billion into global equity funds in the week to July 29.

Global equity funds drew $27.21 billion in net inflows last week, the most in three weeks, as investors bought tech funds during the AI selloff.

The weekly tally, the largest since July 8, reversed two straight weeks of U.S. equity outflows totaling $10.68 billion, according to LSEG Lipper data covering 28,913 funds.

U.S. equity funds attracted $11.83 billion, while European and Asian funds took in $7.79 billion and $5.37 billion, respectively. Technology-sector funds drew $5.67 billion, their biggest weekly purchase since July 8, followed by $2.1 billion into financials and $766 million into consumer staples.

The buying came as Alphabet and Tesla reported negative cash flows, pressuring tech shares, but strong results from Microsoft and Amazon eased concerns about heavy AI capital spending. Global stocks rose about 1.5 percent on Thursday, with Microsoft jumping more than 15 percent and adding $450 billion to its market value, the largest single-day gain for any company on Wall Street.

Bonds Cool as Money Market Funds Bleed

Bond funds cooled to a 17-week low of $6.16 billion in inflows, with high-yield funds posting $789 million in outflows, broadly reversing the prior week's $815 million in net purchases. Government bond funds drew $1.99 billion, down from $3.13 billion, while short-term bond funds attracted $478 million, versus $1.74 billion the week before.

Money market funds stayed out of favor for a third consecutive week, posting $6.55 billion in net outflows. Gold and other precious-metals funds extended their winning streak to three weeks with $281 million in inflows.

In emerging markets, investors added $1.75 billion to equity funds for a third straight week but withdrew roughly $800 million from bond funds.

AI Rally Reshapes Global Positioning

The AI trade's resilience was visible across global markets. The MSCI Asia Pacific Index jumped 4.3 percent, its biggest gain in nearly four months, as South Korea's Kospi surged as much as 17 percent on a rally in Samsung Electronics and SK Hynix. Taiwan stocks gained more than 7 percent. In the U.S., the S&P 500 rose 1.66 percent, the Nasdaq climbed 2.78 percent, and the Dow added 1.19 percent.

The rally came as the Federal Reserve held rates at 3.50 to 3.75 percent in a 9-3 vote, with three members favoring a quarter-point hike, and Chair Kevin Warsh stressed the committee's commitment to returning inflation to 2 percent. The rupee strengthened 20 paise to 95.30 against the dollar, while India's VIX held at 12.16, reflecting subdued volatility.

The flows suggest investors view the pullback as a buying opportunity rather than the start of a deeper correction, betting the AI-driven advance has further to go. The next test comes as more hyperscalers report earnings and the Federal Reserve's September meeting approaches, with markets pricing roughly a 57 percent probability of a rate increase.

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