Global equity funds attract biggest inflow in five weeks as concerns around AI ease

Group 1 - Global equity funds experienced their strongest inflows in five weeks, with $36.33 billion invested during the week ending February 18, driven by easing concerns over AI stocks and investor rotation into other sectors [1] - U.S. consumer price data indicated a 2.4% year-on-year inflation rise in January, close to the expected 2.5%, reinforcing market expectations for two Federal Reserve rate cuts this year [2] - European funds attracted $17.22 billion, maintaining strong inflows supported by the STOXX 600 index reaching a record high [2] Group 2 - U.S. funds recorded net inflows of $11.77 billion after a previous outflow of $1.48 billion, while Asian funds attracted a net $3.8 billion [3] - Sectoral funds in industrials, metals and mining, and technology saw significant demand, with net inflows of $1.82 billion, $818 million, and $696 million, respectively [3] - Global bond funds marked a seventh consecutive week of net inflows, attracting $19.79 billion [3] Group 3 - Short-term bond funds received $5 billion, the highest weekly inflow since December 24, while euro-denominated bond funds and corporate bond funds attracted net purchases of $2.54 billion and $2.35 billion, respectively [4] - Money market funds extended inflows to a fourth consecutive week, receiving $7.05 billion, although gold and precious metals funds experienced net outflows of $1.86 billion, ending a five-week inflow streak [4] Group 4 - Emerging market equity funds attracted $8.1 billion, bringing year-to-date inflows to $56.52 billion, while bond funds also saw $1.94 billion in net purchases for the second consecutive week [5] - Market economist Elias Hilmer noted that despite the underperformance of U.S. tech stocks compared to emerging markets, the AI rally may still have further potential [5] - It was suggested that if the AI bubble bursts, equities in emerging markets might perform better than those in the U.S. [6]