In the week ending April 2, global money market funds experienced significant inflows as investors grew increasingly wary of U.S. President Donald Trump’s aggressive trade policies. These policies have raised concerns about a potential global economic slowdown, prompting some economists to adjust their recession forecasts. Money market funds, typically viewed as safe havens during economic uncertainty, amassed $30.26 billion in inflows during this period as Trump imposed broad reciprocal tariffs on trading partners, escalating trade tensions.
Conversely, global equity funds recorded a meager $49 million in net purchases, a stark decline from the prior week’s impressive net buying of approximately $35.84 billion. U.S. equity funds, in particular, faced net selling of $10.85 billion, reversing the previous week’s inflows of $22.39 billion. However, European and Asian equity funds saw some silver lining, with allocations of $6.84 billion and $4.36 billion, respectively.
Global sectoral equity funds faced net sales of $1.75 billion, predominantly driven by outflows in the technology and consumer discretionary sectors, which saw $1.45 billion and $1.35 billion in declines, respectively. On a more positive note, defensive sectors like utilities thrived, attracting a noteworthy $1.06 billion in net purchases. In the commodities market, gold and precious metals funds demonstrated resilience, marking their eighth consecutive week of inflows with an additional $1.06 billion.
Bond funds also continued to draw investor interest, with net inflows of $4.3 billion, extending their positive streak to two weeks. Particularly, short-term bond funds saw substantial demand, gaining a net $5.02 billion, the largest inflow in four weeks. Meanwhile, an analysis of 29,591 emerging market funds revealed a trend of investors divesting from equity funds, resulting in a net sell-off of $660 million for the fourth straight week.
However, bond funds in this category saw a reversal, gaining $1.07 billion in inflows after two weeks of outflows.