Global equity funds attract third straight week of inflows as investors buy AI-linked dip

Global equity funds recorded net inflows for a third consecutive week, in the week ended June 10, as investors took advantage of a recent market pullback to increase exposure to technology stocks, betting that the artificial intelligence-driven rally still has room to run, according to LSEG Lipper data.

Global equity funds attracted net inflows of $3.32 billion during the week, sharply lower than the $21.12 billion invested in the previous week.

According to Reuters, investor sentiment towards AI-related stocks remained resilient despite a broader market correction. The MSCI World Index had fallen as much as 4.8% from its record high of 1,138.3 reached last week but subsequently recovered about 2.3%, supported by renewed optimism over the possibility of a peace agreement between Iran and the United States.


Experts claim that investors who remain underexposed to the AI supply chain could consider selectively increasing allocations during periods of market weakness, noting that underlying indicators of AI demand continue to remain strong, as per a Reuters report.

Regional fund flows were mixed. European equity funds recorded net inflows of $6.74 billion, while Asian equity funds attracted $6.37 billion. In contrast, U.S. equity funds posted net outflows of $12.57 billion, marking their first weekly outflow in three weeks.

Sector-wise, technology funds remained the biggest beneficiaries, drawing $7.05 billion and extending their inflow streak to ten consecutive weeks. Financial sector funds received $624 million, while industrial funds attracted $545 million, according to Reuters.

Global bond funds also remained in demand, registering $18.27 billion in net inflows and extending their winning streak to ten weeks.

Investors allocated $6.7 billion to short-term bond funds, the largest weekly inflow in three weeks. Dollar-denominated medium-term bond funds attracted $3.21 billion, while euro bond funds received $2.26 billion.

Meanwhile, money market funds experienced net outflows of $18.21 billion, reversing the previous week's massive $154.64 billion inflow.

Commodity-related funds remained under pressure, with investors withdrawing $1.86 billion from gold and other precious metals funds, marking the fourth straight week of outflows, according to Reuters.

Emerging market assets also continued to see selling pressure. Reuters, citing data covering 28,937 funds, reported that investors withdrew a net $944 million from emerging market bond funds and $3.4 billion from emerging market equity funds, extending the latter's outflow streak to seven consecutive weeks.