Global money market funds attract biggest weekly inflows in three months

Sept 8 – Global money market funds attracted robust inflows in the week ended Sept. 6, as investors gravitated towards safer options amid concerns over slowing growth in China and Europe as well as uncertainty regarding the Federal Reserve’s interest rate outlook.

Investors poured about USD 57.38 billion into global money market funds in their most significant weekly net purchases since June 7, LSEG data showed.

Investors favored safer assets on worries that a slowdown in China and Europe would weigh down global growth.

Data from the euro area and Britain showed activity in the services industries contracted in August. Meanwhile, a private-sector survey showed that China saw services activities expanding at the slowest pace in eight months in August.

By region, US, European, and Asian money market funds drew USD 32.18 billion, USD 20.75 billion, and USD 1.64 billion, respectively, in inflows.

Meanwhile, withdrawals from global equity funds eased as investors pulled out a net USD 2.45 billion, the smallest amount in five weeks.

Investors withdrew USD 463 million from communication services sector funds, while metals & mining, healthcare, and consumer staples saw outflows of about USD 300 million each.

On the other hand, global bond funds drew USD 9.24 billion worth of inflows, the biggest amount in nine weeks.

Among commodities, precious metal funds saw USD 518 million worth of net selling, the 15th weekly outflow in a row, but energy funds received inflows for a second week, worth about USD 101 million.

Data for 28,201 emerging market funds showed equities suffered outflows for a fourth successive week, valuing USD 1.81 billion on a net basis. Investors also pulled out about USD 271 million from bond funds.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Susan Fenton)