Global money market funds pulled in a net $46.1 billion in the week through September 2, the largest weekly inflow since August 5, according to LSEG Lipper data. The rush toward cash came as escalating U.S.-Iran tensions and a selloff in global bonds pushed investors toward safer, shorter-duration holdings.
The U.S. struck Iranian military targets near the Strait of Hormuz last week, and Tehran said it had hit U.S. assets across the region in response. Brent crude jumped to a nearly six-week high of $97.62 a barrel on the news, adding fresh pressure to inflation expectations already on investors’ minds.
Rate worries added to the unease. Federal Reserve Chair Kevin Warsh said last week that the central bank would “have work to do” if policymakers weren’t confident underlying inflation was returning to its 2% target.
Despite the caution, global equity funds pulled in $6.65 billion, more than reversing the prior week’s $6.13 billion in outflows. European equity funds led the gains with $13.09 billion in net inflows, followed by $4.22 billion into Asian equities, even as investors pulled roughly $11.12 billion out of U.S. equity funds. Sector-wise, tech funds broke a two-week inflow streak with $856 million in net sales, while financial and industrial funds saw outflows of $1.35 billion and $484 million, respectively.
Global bond funds took in $10.01 billion, a five-week low, though short-term bond funds bucked the trend with $7.43 billion in inflows, their strongest showing since July 8. Loan participation funds added $1.08 billion, while government and corporate bond funds saw outflows of $3.34 billion and $1.41 billion.
Gold and other precious metals funds extended their inflow streak to eight straight weeks with $2.85 billion added, while energy funds logged a third consecutive weekly outflow of $232 million. Emerging-market funds stayed in favor too: equity funds drew $1.99 billion for an eighth straight week of gains, and bond funds added $646 million. The figures span 28,994 funds tracked by LSEG Lipper.
Herald View: The numbers tell two stories at once: investors rushed to cash and short-duration debt on geopolitical and inflation risk, yet still bought equities and gold in the same week. That’s hedging, not panic. The real test is whether a wider Iran conflict or a hawkish turn from Warsh turns this cautious tilt into a genuine flight to safety.