Global Navigator | Investors tune out intensifying US-Iran conflict

Going into the second half of July, investors continued to act as if missiles in the Straits of Hormuz are transitory but artificial intelligence (AI) is transformative. While missile exchanges between the US and Iran intensified, EPFR-tracked Bond and Equity Funds absorbed a combined $75 billion as Technology Sector Funds pulled in another $15.5 billion.

The flows to Technology Sector Funds, which took the total since the beginning of April over the $70 billion mark, came during a week when US technology bellwether IBM quantified the challenge posed by AI to existing software and services business models and New York State Governor Kathy Hochul imposed a one-year ban on new data centers. Semiconductor Funds posted their third largest inflow on record, Datacenter & Infrastructure Funds tallied consecutive weekly outflows for the first time in over 13 months and money flowed out of Software & Services Funds for the fifth time over the past six weeks.

With oil prices heading north again – though holding below $80 a barrel – Inflation Protected Bond Funds added to their longest run of inflows in over four years and Physical Gold Funds, which snapped their longest redemption streak since 1Q24 the previous week, recorded their second straight inflow while Cryptocurrency Funds chalked up their ninth outflow during the past 10 weeks.

At the asset class and single country fund levels, Cybersecurity Funds tallied their biggest inflow since 1Q23, Dividend Equity Funds absorbed fresh money for the 23rd time year-to-date, investors pulled money out of Bear Funds for the sixth straight week and flows into Natural Gas Funds hit a 26-week high. Both Russia and Qatar Bond Funds posted their biggest outflows since EPFR started tracking them, Singapore Equity Funds recorded their 26th inflow of the year and Australia-mandated Alternative Funds extended their longest run of redemptions since 4Q25.