Global Navigator | Navigating the late-October crosscurrents

The fourth week of October saw major artificial intelligence (AI) plays rewarded and punished for their investments in this evolving technology, the US Federal Reserve keep interest rates on hold despite headline inflation remaining well above its 2% target, election results in Brazil and Israel confounding many predictions and Chinese policymakers stepping up their efforts to stabilize the mainland’s equity markets.

Flows to EPFR-tracked funds during the latest week reflected these shifts and, at times, contradictions.Technology Sector Funds took in more than six times the amount of fresh money that went to the second-most popular group but posted their biggest outflow in over a month on the final day of the reporting period. Flows into Inflation Protected Bond Funds hit their highest level since early June while Physical Gold Funds posted their biggest outflow since the final week of June. Leveraged and Bear Funds recorded inflows during the same week for only the 10th time year-to-date.

The latest numbers did capture a modest reduction in risk appetite, with Cryptocurrency Funds chalking up their third outflow of the month and Frontier Markets Bond Funds experiencing their heaviest redemptions since late 4Q24. There was also strong appetite for exposure to asset classes associated with income streams. Dividend Equity Funds pulled in over $3 billion and Municipal Bond Funds over $2 billion while Autocallable Funds chalked by their 51st inflow over the past 12 months.

Overall, EPFR-tracked Bond Funds absorbed a net $15.3 billion during the week ending Oct.28. That took their YTD total to 98% of last year’s record. Investors also steered $3.3 billion into Money Market Funds and $ 56.2 billion into Equity Funds.

At the asset class and single country fund levels, Robotics Funds recorded their biggest inflow in over three months, redemptions from Copper Funds climbed to a 25-week high and flows into Natural Gas Funds hit their highest level since mid-July. Australia Bond Funds chalked up their 38th inflow so far this year, money flowed out of Austria Equity Funds for the 11th week running and Chile Equity Funds posted a third straight outflow for the first time since mid-May.