AI Optimism Fuels Global Equity Fund Inflows
Global equity funds experienced a positive turnaround with $28.36 billion net inflows, fueled by optimism in AI investments and potential U.S. rate cuts. Nvidia's substantial investment announcement further boosted market confidence. Concurrently, bond funds received robust investments, while money markets faced withdrawals amid shifting investor strategies.
After weeks of outflows, global equity funds saw a significant revival with net inflows amounting to $28.36 billion. This turnaround was largely driven by growing optimism surrounding artificial intelligence investments, alongside speculations of potential U.S. Federal Reserve rate cuts that lifted investor mood.
Nvidia's announcement of a $100 billion investment in OpenAI catalyzed fresh inflows, while market anticipation for a Federal Reserve rate cut in October remained high, reaching an 87.7% probability according to CME's Fed Watch. This sentiment was bolstered despite mixed messages from central bank officials.
Global bond funds also recorded impressive inflows of $22.96 billion, marking a peak unseen since 2022. Meanwhile, money market funds experienced significant withdrawals as investors readjusted their portfolios, capitalizing on the promise shown by equities and bonds.
(With inputs from agencies.)
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