Global stock fund investments slowed dramatically in the week ending June 24, as unease over debt-driven technology spending and a tough stance from the U.S. Federal Reserve took the wind out of investor confidence.
According to data from LSEG Lipper, investors put a net $7.51 billion into global equity funds during the week — a steep drop of roughly 86% compared to the $55.53 billion in net purchases recorded the week before.
The pullback was driven in part by growing concern over inflated technology stock values, with major tech companies coming under increased scrutiny for relying on borrowed money to fund their operations. Elon Musk’s SpaceX was among the high-profile names turning to the bond market for financing, adding to fears that the sector’s spending boom is becoming overly dependent on debt.
Investor confidence was further shaken by inflation data released Thursday by the Commerce Department, which showed the Personal Consumption Expenditures price index — a closely watched inflation measure — rose to 4.1% in May, its highest level since April 2023. That reading strengthened expectations that the Federal Reserve could raise interest rates by another 25 basis points later this year.
European equity funds attracted $6.28 billion in inflows during the week, down from $11.71 billion the previous week, while Asian equity funds drew $2.95 billion, compared to $3.82 billion the week before. U.S. equity funds, meanwhile, saw $3.53 billion flow out.
Technology sector funds recorded net outflows of $17.83 billion for the week, nearly wiping out the $21.5 billion in inflows seen the prior week. Financial sector funds and industrial sector funds also saw net outflows of $750 million and $1.04 billion, respectively.
On the bond side, investors added a net $10.85 billion to bond funds, marking the 12th consecutive week of net purchases. Global hard-currency bond funds, short-term bond funds, and dollar-denominated medium-term bond funds saw notable inflows of $3.1 billion, $2.42 billion, and $1.87 billion, respectively.
Money market funds experienced outflows of $42.8 billion during the week — the largest single-week withdrawal since April 15.
In the commodities space, gold and other precious metal funds posted a sixth straight week of outflows, with net sales totaling $545 million. Energy funds also recorded net sales of $81.9 million, ending a two-week stretch of inflows.
In emerging markets, equity funds continued a selling trend that has now stretched nine consecutive weeks, with $3.39 billion in net outflows. Emerging market bond funds, however, attracted $132 million — their first inflow in three weeks — based on data covering 28,875 funds.
