Global Navigator | The real fear of not missing out on inflation

During the second week of August, fear of missing out on the artificial intelligence (AI) story continued to give ground when it came to shaping mutual fund and ETF flows to the fear central banks are slipping behind the curve when it comes to inflation. While Technology Sector Funds posted consecutive weekly outflows for the first time since early January and Taiwan (Province of China) Equity Funds chalked up their first outflow since late April, flows into Inflation Protected Bond and Physical Gold Funds hit eight and 24-week highs, respectively.

The latest week did, however, end with the release of US inflation data that undershot expectations, triggering a fresh surge of money in US Equity Funds that helped propel the benchmark S&P 500 Index to a new record high.

Both Bear and Leveraged Funds recorded net outflows during the latest week, marking their eighth in the past 10 weeks and first in nine weeks, respectively. However, in both instances, flows on the final day of the reporting period – Aug 12 – reversed course. At the country fund level, it was a fifth consecutive week of outflows for Chinese mainland Leveraged Funds, redemptions from Taiwan (Province of China) Leveraged Funds were the heftiest in a year and snapped an inflow run that started end of April, while US and Korea Leveraged Funds took in fresh money.