Tech weakness sends weekly global equity fund inflows sharply lower

• U.S. equity funds saw $3.53 billion in outflows while European and Asian funds attracted $6.28 billion and $2.95 billion respectively, both down from prior week levels
• Bond funds extended their buying streak to 12 consecutive weeks with $10.85 billion in inflows, while money market funds posted $42.8 billion in outflows, the largest weekly withdrawal since April 15
• Emerging market equity funds recorded their ninth straight week of outflows at $3.39 billion, though EM bond funds attracted $132 million in their first inflow in three weeks

Market Summary: Global Equity Fund Inflows Plunge on Tech Concerns

Key Developments

Global equity fund inflows dropped 86% to $7.51 billion in the week ending June 24, down sharply from $55.53 billion the previous week, according to LSEG Lipper data. The decline reflects growing investor concerns over debt-funded technology spending and hawkish Federal Reserve policy.

Technology Sector Reversal

Technology sector funds experienced dramatic outflows of $17.83 billion, essentially reversing the prior week's $21.5 billion in inflows. Investors are scrutinizing stretched tech valuations and the sector's increasing reliance on bond market borrowing, with major companies including those linked to Elon Musk tapping debt markets to fund expansion.

Inflation and Rate Concerns

Sentiment deteriorated following Commerce Department data showing May PCE inflation at 4.1%—the highest since April 2023—reinforcing expectations for a possible 25-basis-point Fed rate hike later in 2026.

Regional Performance

• U.S. funds: $3.53 billion in outflows
• European funds: $6.28 billion in inflows (down from $11.71 billion)
• Asian funds: $2.95 billion in inflows (down from $3.82 billion)
• Emerging market equities: $3.39 billion in outflows, extending a nine-week selling streak

Other Asset Classes

Bond funds continued their strong performance with $10.85 billion in inflows, marking the 12th consecutive week of buying. Hard-currency bonds ($3.1 billion), short-term bonds ($2.42 billion), and dollar-denominated medium-term bonds ($1.87 billion) attracted notable interest.

Money market funds posted the largest weekly withdrawal since April 15 at $42.8 billion. Financial and industrial sector funds recorded outflows of $750 million and $1.04 billion respectively, while precious metals funds saw their sixth consecutive weekly outflow at $545 million.