Global investors pour into money market funds amid market volatility By Reuters

(Reuters) – Global investors poured substantial sums into money market funds in the seven days to Aug. 7 as they rushed for safety amid a surge in market volatility sparked by fears of a U.S. market slowdown and a strengthening of the yen which caused the withdrawal of transport transactions.

According to LSEG data, investors bought $98.58 billion of global money market funds during the week – the largest weekly net purchase since April 3.

Weaker-than-expected U.S. payments and a sharp drop in July manufacturing data reignited concerns that a recession could potentially impact global companies that depend on exports to the United States.

The stock average fell 12.4% on Monday, its biggest one-day drop, as the yen rallied, evoking memories of the October 1987 “Black Monday” stock market crash.

That risk-off sentiment prompted an outflow of $6.33 billion from global equity funds during the week, the first outflow in seven weeks.

By region, investors unloaded a net $7.39 billion from U.S. equity funds after three straight weeks of net buying. European funds also had outflows of $4.54 billion, while Asian funds attracted inflows of $4.61 billion.

By sector, technology and financials saw significant outflows of $1.11 billion and $1.09 billion respectively, while utilities attracted their sixth consecutive weekly inflows totaling $529 million.

Meanwhile, global bond funds were favored for a 33rd straight week with net inflows of $6.26 billion.

Global investors continued their buying streak in corporate bond funds, marking the 10th straight week of net buying with $2.06 billion. Meanwhile, government bond funds drew in $1.32 billion, but mutual funds saw outflows of $2.98 billion.

Among commodities, investors bought a net $208 million of energy funds, extending net buying for a fifth straight week. Meanwhile, precious metals funds saw $700 million in outflows, the first in four weeks.

The data covering 29,593 emerging market funds showed a net outflow of $2.79 billion from equity funds, the ninth straight weekly net sale. However, bond funds gained inflows of $1.49 billion.