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AI Enthusiasm Fuels Global Equity Fund Surge
25 Sep
Summary
- Global equity funds saw biggest inflows since July 8.
- Tech sector funds attracted significant investment.
- Rising bond yields did not deter equity fund demand.
Global equity funds recorded their highest inflows since early July in the week ending September 25, totaling $44.1 billion. This marked a reversal from recent selling trends, as investor optimism around artificial intelligence and easing oil prices counteracted rising government bond yields.
Demand for technology-sector funds surged, fueled by strong consumer interest in AI applications and record semiconductor exports from South Korea. Strategists noted that AI investment significantly contributes to S&P 500 earnings growth.
Despite a sharp increase in borrowing costs, with the 30-year US Treasury yield reaching a 22-year high, equity markets saw robust inflows. US equity funds led the way with $37.6 billion, while European and Asian funds also reported net purchases.
Bond funds broadly saw inflows, though government bond funds experienced outflows. Gold funds continued their trend of consistent inflows for the 10th week in 11. Emerging markets saw increased investment in bond funds and a marginal inflow into equity funds.
