GRAPHIC-Money market funds attract massive inflows as bond selloff bit

Global money market funds drew strong inflows in the ​week ended October 7 as a ​global bond selloff, concerns over government ‌debt levels ​in parts of Europe and lingering inflation fears pushed investors toward safer assets. Investors bought global money market funds of a net $153.81 billion ‌during the week, registering their largest weekly net purchase since May 6, LSEG Lipper data showed.

French bonds came under selling pressure last week, pushing the 10-year yield to a 24-year high of 4.994%, ‌amid concerns over the country's wide budget deficit exceeding 5% of GDP and a potentially divisive ‌presidential election next year. The US 10-year Treasury yield also climbed to a 24-1/2-year high of 5.3645% on Wednesday, as higher oil prices raised fears that inflation could prove more persistent than expected.

Investors, meanwhile, made net purchases of $560 million ⁠in global equity ​funds — the smallest ⁠weekly inflow in three weeks. European equity funds attracted $6.19 billion, their largest weekly inflow in four weeks. Investors also added ⁠a net $6.16 billion to Asian equity funds, but withdrew $5.11 billion from U.S. funds.

Among sectoral funds, technology, utilities and industrials recorded ​notable inflows of $5.37 billion, $1.10 billion and $1.03 billion, respectively. Financial sector funds, however, saw weekly ⁠outflows of $3.47 billion. Global bond funds drew $26.03 billion in the week, their largest weekly inflow since July 8.

Short-term bond funds ⁠gained $9.36 ​billion, marking their largest weekly inflow in three months. Government bond funds and loan participation funds also recorded notable inflows of $4.65 billion and $1.89 billion, respectively. Among commodity funds, gold and other precious ⁠metals funds recorded a fourth consecutive week of net purchases, totalling $1.41 billion. Investors also bought $269 million ⁠worth of energy funds.

In emerging ⁠markets, bond funds attracted $1.48 billion in weekly inflows, broadly reversing the prior week's $1.86 billion in outflows. Equity funds, however, recorded a fifth consecutive weekly outflow ‌of $752 million, according ‌to data covering 27,895 funds.