Amid US downgrading and economic troubles, there have been the greatest inflows into global money market funds since March.
Amid US downgrading and economic troubles, there have been the greatest inflows into global money market funds since March.
During the week preceding August 2, investors sought out safer assets due to a downgrading of the U.S. credit rating and weak economic data from China and the euro zone. Global money market funds saw a substantial capital inflow as a result of this.
Refinitiv Lipper statistics show that over the previous week, investors bought global money market funds for a net total of $67.52 billion, which is the greatest weekly net purchase since March 22.
Investors showed caution after rating agency Fitch abruptly lowered the top-tier sovereign credit rating of the United States on Tuesday from AAA to AA+, citing budgetary deterioration.
This week’s news that showed a sharp decrease in factory activity in Europe and a slowdown in manufacturing activity in China reduced investors’ hopes for global growth.
While Asia experienced a second weekly outflow of $360 million, the United States and Europe saw inflows of $58.56 billion and $14.35 billion, respectively, into money market funds.
However, inflows into riskier global stock funds totaling around $4.45 billion were made in a second straight week of net purchases.
However, the majority of equities sector funds had inflows, as investors withdrew a net $490 million, $468 million, and $318 million from utilities, healthcare, and tech sector funds, respectively.
The $2.98 billion inflow into international bond funds was the lowest in the previous six weeks. The largest in three weeks for global government bond funds was an inflow of $2.02 billion, whereas high-yield bonds saw an outflow of $749 million.
According to data for commodities funds, precious metal funds lost $892 million in net selling for the ninth consecutive week. Investors also sold $82 million worth of energy funds.
Investors pulled nearly $487 million from bond funds following eight straight weeks of net purchases, according to data for 24,127 emerging market funds. On the other hand, equity funds took in around $196 million.
