Money market funds draw $153.81 billion as bond funds also gain

Global money market funds attracted $153.81 billion in net purchases in the week ended October 7, their largest weekly inflow since May 6, Reuters reported on October 9, citing LSEG Lipper data. The surge coincided with a bond-market selloff, yet investors also added money to bond funds—showing that the reported allocations extended beyond a move into cash-like investments.

Reuters linked the money market inflows to concerns over government debt in parts of Europe and persistent inflation fears. Its figures describe net purchases across fund categories; they do not identify individual buyers or establish how much money moved directly from selling bonds into money market funds.

Bond funds gain despite rising yields

Global bond funds received $26.03 billion during the same week, their largest weekly inflow since July 8. That positive balance is an important qualification to the selloff: selling pressure in bond markets coincided with net buying of bond funds, rather than a withdrawal from the entire category.

Short-term bond funds attracted $9.36 billion, their largest weekly inflow in three months. Government bond funds received $4.65 billion, while loan participation funds gained $1.89 billion, according to the figures in Reuters’ report. Alongside money market funds, shorter-term bond investments therefore also drew substantial purchases.

The U.S. 10-year Treasury yield reached 5.3645% on Wednesday, October 7, which Reuters described as a 24½-year high. The report associated that move with higher oil prices and fears of more persistent inflation. These are reported levels from the period, rather than live yields for October 9.

Equity buying splits across regions and sectors

Global equity funds attracted a much smaller $560 million in net purchases, their weakest weekly inflow in three weeks. The total remained positive, but the regional figures showed markedly different allocations: European equity funds gained $6.19 billion and Asian equity funds received $6.16 billion, while U.S. equity funds lost $5.11 billion.

Europe’s inflow was its largest in four weeks. The regional amounts highlighted by Reuters are not presented as an exhaustive reconciliation of the global equity total, so they should not be treated as a complete breakdown of where every dollar went.

Sector funds also diverged. Technology funds attracted $5.37 billion, utilities received $1.10 billion and industrials gained $1.03 billion. Financial sector funds, by contrast, recorded $3.47 billion in outflows during the week.

Gold and other precious metals funds received $1.41 billion, marking their fourth consecutive week of net purchases. Energy funds attracted a further $269 million. Those amounts measure money entering funds, rather than changes in commodity prices or the returns investors earned.

Emerging-market bond funds gained $1.48 billion after losing $1.86 billion the previous week. Emerging-market equity funds recorded a fifth consecutive weekly outflow, losing $752 million. Reuters cited data covering 27,895 funds in that emerging-market discussion; it did not establish that figure as the sample for all its global totals.

What money market funds hold—and their risks

Money market funds hold liquid short-term debt, cash and cash equivalents, according to a November 2024 investor bulletin from the U.S. Securities and Exchange Commission. Investors use them to store cash, and their yields generally track short-term interest rates. That explains the category receiving the largest inflow highlighted in Reuters’ report.

The SEC bulletin distinguishes government money market funds from prime funds, which mainly hold short-term corporate and bank debt, and describes both retail and institutional investors. Reuters’ latest global figures do not separate the $153.81 billion inflow along those lines or identify which investors supplied it.

SEC staff describe money market funds as relatively low-risk compared with most investments, but losses remain possible. The bulletin states: ‘Money invested in a money market fund, like money invested in any mutual fund, is not guaranteed by the FDIC’. That is U.S. regulatory background, not a description of protection in every country.

The bulletin also identifies inflation eroding returns and heavy redemptions causing runs as general risks. It predates October’s flows and is not a response to them. The weekly Reuters figures do not establish whether the new inflows will persist or how investors will allocate money in subsequent weeks.

The weekly allocations are detailed in Reuters’ report published by CNA; the SEC’s money market fund bulletin provides the separate U.S. background on fund structures and risks.