Goldman Sachs said mutual funds and related investment products recorded net positive flows across both equities and fixed income for the week ending July 8.
In a weekly breakdown, global equity funds attracted net inflows of $56 billion in the week ending July 1, reversing the prior weeks outflows of $14 billion. Within developed markets, US-focused funds were the primary beneficiaries of equity inflows. In the emerging markets segment, funds concentrated on Mainland China, Korea, and Taiwan were the principal drivers of the net inflows recorded in that period.
Korea and Taiwan funds have seen a marked pickup in capital this year. Goldman Sachs strategists anticipate that pronounced earnings growth, supported by what the firm describes as a memory super-cycle, will continue to underpin equities in Korea and Taiwan, albeit with elevated volatility. The firm has also noted that South Koreas external surplus is expected to increase as its technology exports gain in value; much of that surplus has been redirected into foreign equities, a dynamic that has put downward pressure on the Korean currency. Across equity sectors, technology funds received the largest inflows.
On the fixed-income side, funds sustained robust support from investors. Goldman Sachs reported inflows across various bond fund categories, with short-duration bond funds and inflation-protected bond funds showing persistent net purchases. In the emerging markets debt space, both hard-currency and local-currency bond funds recorded net inflows in the referenced period. Meanwhile, money market fund assets rose by $40 billion, indicating a notable allocation to cash-like instruments.
Cross-border foreign exchange flows were broadly positive, reflecting supported risk sentiment according to the report. The US dollar experienced the strongest net demand among currencies, while the Chinese yuan registered the largest net outflows.
Summary
Net positive flows were reported across global equities and fixed income for the week ending July 8. A separate weekly measure showed $56 billion of net inflows into global equity funds in the week ending July 1, reversing the prior weeks $14 billion of outflows. US funds led developed market inflows, while Mainland China, Korea, and Taiwan drove emerging market equity flows. Fixed-income funds, including short-duration and inflation-protected strategies, continued to attract capital, and money market assets increased by $40 billion. FX flows favored the US dollar, with the Chinese yuan seeing the largest outflows.
Market sectors affected
- Equities - particularly technology and select Asian markets (Korea, Taiwan, Mainland China)
- Fixed income - short-duration and inflation-protected bond funds; emerging markets debt
- Money markets - increased assets under management
- Foreign exchange - US dollar demand and pressure on the Chinese yuan