Global money market funds record inflows for third consecutive day By Reuters

(Reuters) – Global investors added heavily to money market funds in the week ended Oct. 9, reflecting a decline in Federal Reserve interest rate cut expectations and caution over the Middle East conflict.

Investors also poured capital into liquid money market funds as they awaited a highly anticipated update on Beijing’s stimulus measures this weekend.

According to LSEG data, global money market funds recorded net inflows of $24.55 billion during the week, after recording net purchases of about $22.78 billion in the previous week.

Investors adjusted their views on future Fed rate cuts last week after a stronger-than-expected U.S. nonfarm payrolls report last month, boosting demand for low-risk assets.

Asian money market funds recorded a significant inflow of $12.88 billion, the highest since January 10. European and US funds also recorded net purchases worth $7.78 billion and $2.54 billion, respectively.

However, demand for riskier equity funds faded as investors bought just $3.65 billion in global equity funds, compared to net purchases of $35.97 billion the previous week.

Funds in the technology, financial and metals & mining sectors received a significant $572 million, $417 million and $148 million, respectively, while the healthcare sector recorded net sales of $520 million.

Foreign equity funds from China attracted a hefty $8.52 billion, the largest one-week amount since at least December 2020.

Global bond funds increased investment for the 42nd consecutive week as investors pumped $12.43 billion into these funds.

Investors bought a net $2.16 billion in short-term bond funds after net sales of $3.3 billion a week ago. Meanwhile, sovereign, high-yield and credit equity funds recorded net purchases worth $1.96 billion, $906 million and $737 million, respectively.

Gold and other precious metals funds remained attractive for the ninth straight week, attracting around $780 million in inflows. However, energy funds saw a marginal outflow of $11 million.

Data on 29,545 emerging market funds showed that equity funds attracted a massive $8.55 billion, the largest amount since January 2021. Investors also bought $1.76 billion worth of bond funds.