International stock funds attracted fresh investment for the third consecutive week, as market participants capitalized on recent declines to boost their technology holdings, anticipating the artificial intelligence boom will persist.
According to LSEG Lipper data, investors added a net $3.32 billion to international equity funds during the week ending June 10, down from $21.12 billion in net purchases the previous week.
“For investors who may have under-allocated to the AI supply chain, we think select additions on weakness may make sense,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note earlier this week. “Underlying measures of AI demand remain firmer.”
The MSCI World Index dropped as much as 4.8% from the previous week’s record peak of 1,138.3, though it has since bounced back approximately 2.3% amid fresh optimism about potential diplomatic progress between Iran and the U.S.
Funds focused on European and Asian markets experienced weekly net additions of $6.74 billion and $6.37 billion respectively. Meanwhile, U.S.-focused funds posted $12.57 billion in withdrawals, representing their first weekly net outflows in three weeks.
Technology-focused funds captured $7.05 billion in their tenth consecutive week of positive flows. Financial and industrial sector funds received $624 million and $545 million respectively.
International bond funds registered net weekly additions of $18.27 billion, extending their purchasing momentum to 10 consecutive weeks.
Market participants allocated $6.7 billion to short-duration bond funds, representing the largest weekly addition in three weeks, while directing $3.21 billion to dollar-denominated medium-term bond funds and $2.26 billion to euro-based bond funds.
Money market funds experienced $18.21 billion in net withdrawals, shifting direction after attracting substantial inflows of $154.64 billion the week before.
Participants also pulled a net $1.86 billion from gold and other precious metal funds, continuing a pattern of withdrawals for the fourth straight week.
Emerging market investments faced selling pressure as participants withdrew a net $944 million from bond funds and $3.4 billion from equity funds, extending outflows to seven consecutive weeks, according to data encompassing 28,937 funds.
