Feb 27 (Reuters) – Global equity fund inflows eased to a five-week low in the seven days to February 25 as investors turned cautious amid growing unease over the heavy costs and potential disruption linked to artificial intelligence.
Investors bought a net $19.75 billion worth of global equity funds, marking the smallest weekly inflow since $9.55 billion in the week to Jan. 21, LSEG Lipper data showed.
Nvidia shares dropped 5.46% on Thursday, while the Nasdaq Composite Index shed 1.2% after Nvidia’s earnings report showed that fourth-quarter revenue growth slowed, despite beating analysts’ estimates.
“We believe big market moves in recent months should be a trigger to review portfolios,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
“Higher-than-expected capital expenditure and rising competition have raised uncertainty in the AI field, making selectivity and diversification more important.”
European equity funds saw weekly inflows of $11.69 billion after a net $18.61 billion purchase in the prior week. Asian and U.S. funds drew net inflows of $3.22 billion and $2.01 billion, respectively.
Sectoral funds had a mixed set of data as industrials, and metals and mining secured net inflows of $1.5 billion and $1.02 billion, respectively, while financials and tech faced outflows of $2.55 billion and $257 million, respectively.
Inflows into bond funds, meanwhile, cooled to a five-week low of $12.68 billion.
The short-term bond funds segment received $1.25 billion, the smallest weekly net since January 21. Euro-denominated bond funds and corporate bond funds had inflows of $2.2 billion and $1.4 billion, respectively.
Money market funds saw the largest weekly net purchase in three weeks, at approximately $19.97 billion.
Gold and precious metals commodity funds saw a surge in demand in the most recent week as these funds drew $5.57 billion worth of inflows, the largest amount since October 22.
In emerging markets, equity funds remained popular for the 10th straight week as these funds drew net investments of $11.86 billion. Investors also pumped $3.13 billion into bond funds, data for a combined 28,718 funds showed.
(Reporting by Gaurav Dogra; with additional reporting by Patturaja Murugaboopathy in Bengaluru, Editing by Louise Heavens)
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