Investors took a “steady and diversified” approach to mutual fund allocations in the first week of August as tensions over North Korea’s nuclear capability increased.
EPFR Global fund flow data showed that money market funds attracted the largest share of fresh money in the week to August 9 – with US funds seeing their largest sums in over eight months.
Overall, money market funds saw $46 billion inflows, the largest for the sector since the third quarter of 2015.
“The first week of August saw American president Donald Trump tweeting about the ‘fire and fury’ that could be unleashed on North Korea and its leader Kim Jong Un if the increasingly nuclear-capable nation keeps threatening the US. But, against this backdrop of bellicose rhetoric between Trump and Kim, investors opted for ‘steady and diversified’ when it came to their mutual fund allocations,” said Cameron Brandt, EPFR Global research director.
Among major equity fund groups, global equity saw the biggest inflows, absorbing $6.3 billion.
Bond funds took in $9.5 billion as investors appeared to revisit earlier assumptions about the pace of monetary tightening in the US and the timing of the European Central Bank’s exit from its current quantitative easing program, said Brandt.
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