Global Money Market Funds See Surge in Inflows

The week leading up to October 2 saw significant inflows into global money market funds as investor apprehension ahead of an important U.S. payrolls report and elevated geopolitical tensions in the Middle East increased demand for safer assets.

According to LSEG Lipper data, investors purchased money market funds for a net total of $23.21 billion during the week, which came after a huge net buy of $98.19 billion the week before.

However, concerns over the state of the American labor market were allayed by a better-than-expected September nonfarm payrolls report released on Friday, which also reduced market betting for a bigger Fed rate decrease in November.

The week of October 2 saw a noteworthy $41.32 billion in inflows into U.S. money market funds, which had seen net purchases of $113.11 billion the previous week.

However, there were $8.91 billion and $8.81 billion in withdrawals from Asian and European funds, respectively.

During the week, inflows into global stock funds were approximately $33.89 billion, compared to net sales of $13.85 billion the week before.

Driven by Beijing’s aggressive stimulus efforts, investors bought up China equities funds worth approximately $5.31 billion, marking the greatest weekly net purchase since at least December 2020.

However, sectoral stock funds continued to lose value, with outflows of almost $394 million for a sixth week in a row. Funds in the healthcare and banking sectors saw noteworthy net sales of $823 million and $728 million, respectively.

For the forty-first week in a row, global bond funds attracted inflows totaling $9.47 billion on a net basis.

Demand for high-yield funds was strong as they saw net inflows of $4.56 billion, the most since mid-November 2023. Additionally, investors purchased $513 million in loan participation funds and $2.89 billion in medium-term funds denominated in dollars.

For the ninth week in a row, investors continued to be drawn to gold and other precious metal funds, resulting in net purchases of $1.05 billion. Energy funds totaling roughly $83 million were also acquired by investors.

The most money invested in equity funds since January 2021, totaling around $7.03 billion, was revealed by data including 29,545 emerging market funds. They also bought bond funds totaling $1.41 billion.