Global money market funds draw large inflows in the week to Oct. 2

(Reuters) – Global money market funds attracted large inflows in the week to Oct. 2 as investor caution ahead of a key U.S. payrolls report and heightened geopolitical tensions in the Middle East boosted demand for safer assets.

Investors bought money market funds worth a net $23.21 billion during the week, following a massive $98.19 billion worth of net purchase in the prior week, LSEG Lipper data showed.

A stronger-than-expected September nonfarm payrolls report on Friday, however, eased worries about the health of the U.S. labour market and pared back market bets of a larger Fed rate cut in November.

The U.S. money market funds drew a significant $41.32 billion worth of inflows in the week to Oct.2, following $113.11 billion worth of net purchases a week ago.

European and Asian funds, however, witnessed outflows of $8.91 billion and $8.81 billion, respectively.

Global equity funds attracted about $33.89 billion worth of inflows during the week in contrast to net sales of $13.85 billion in the previous week.

Investors racked up about $5.31 billion worth of China equity funds, registering the largest weekly net purchase since at least Dec. 2020, driven by Beijing’s aggressive stimulus measures.

Sectoral equity funds, though, remained out of favour for a fifth successive week with about $394 million worth of outflows. Healthcare and financials sector funds experienced a notable $823 million and $728 million worth of net sales.

Global bond funds lured inflows for the 41st consecutive week, to the tune of $9.47 billion on a net basis.

High-yield funds witnessed upbeat demand as they gained a net $4.56 billion in inflows, the biggest amount since mid-November 2023. Investors also acquired dollar-denominated medium-term funds and loan participation funds of $2.89 billion and $513 million, respectively.

Gold and other precious metal funds retained their appeal for the eighth successive week, securing $1.05 billion worth of net purchases. Investors also scooped up about $83 million worth of energy funds.

Data covering 29,545 emerging market funds showed investors poured about $7.03 billion into equity funds, the largest amount since January 2021. They also purchased $1.41 billion worth of bond funds.