Global investors took shelter in safer money market and bond funds in the week to Aug. 4, as the rapidly spreading Delta variant of COVID-19 dampened hopes for a faster recovery from the pandemic, with some economic data already showing signs of a slowdown.
Data from Lipper showed global money market funds attracted inflows of US$36.68 billion, the most in 10 weeks.
Global bond funds received US$14.6 billion in the week, twice the inflows in the previous week.
Graphic: Fund flows into global equities bonds and money markets - https://fingfx.thomsonreuters.com/gfx/mkt/xmvjogwnqpr/Fundper cent20flowsper cent20intoper cent20globalper cent20equitiesper cent20bondsper cent20andper cent20moneyper cent20markets.jpg
Bond prices rallied across the world, with the U.S. 10-year Treasury yield touching a six-month low this week.
Data released during the week showed U.S. manufacturing growth slowed for the second straight month in July, while, U.S. private payrolls increased less than expected.
European bond funds attracted US$7.4 billion, while U.S. bond funds received US$6.7 billion. Asian bond funds also attracted small inflows.
On the other hand, global equity funds received US$9.04 billion, helped by some optimism over strong earnings posted by a majority of U.S. firms in the second quarter.
Graphic: Global bond funds' flows in the week ended Aug 4 - https://fingfx.thomsonreuters.com/gfx/mkt/movanmrqrpa/Globalper cent20bondper cent20funds'per cent20flowsper cent20inper cent20theper cent20weekper cent20endedper cent20Augper cent204.jpg
However, virus concerns capped equity inflows, as the purchases were 47per cent lower compared with the previous week.
Chinese equity funds saw inflows for the first time in seven weeks, as concerns over China's efforts to impose tighter regulations on its publicly traded companies abated slightly.
Across sectors, tech funds secured a net US$1.46 billion, while consumer discretionary and health care funds lured over US$500 million each.
Graphic: Global fund flows into equity sectors - https://fingfx.thomsonreuters.com/gfx/mkt/myvmnmraypr/Globalper cent20fundper cent20flowsper cent20intoper cent20equityper cent20sectors.jpg
Among commodity funds, precious metal funds attracted investments worth US$617 million, their first inflow in four weeks. Energy funds saw outflows for a second successive week.
An analysis of 23,738 emerging market funds showed investors bought a net US$2.8 billion in equity funds, their biggest purchase in over four months, and sold US$190 million in bond funds in the week.
Graphic: Fund flows into EM equities and bonds - https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgmelzpb/Fundper cent20flowsper cent20intoper cent20EMper cent20equitiesper cent20andper cent20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by Vinay Dwivedi)