Funds flowing into US equities slowed amid volatility in global tech/AI stocks
AI summary card
Funds flowing into US equities slowed amid volatility in global tech/AI stocks
From June 19 to 25, offshore inflows into US-focused equity ETFs and mutual funds fell to USD1.4bn, down from USD3.9bn in the previous week; Emerging Markets ETF inflows held at around USD1.8bn.
- Offshore inflows into US-focused funds totaled about USD1.3bn from June 19 to 25, mainly allocated to equity funds.
- US-focused equity ETFs and mutual funds recorded inflows of USD1.445bn, slowing significantly from USD3.897bn in the previous week; month-to-date June inflows reached USD11.480bn, above USD8.770bn in May.
- US-focused bond ETFs and mutual funds saw outflows of USD152mn, versus outflows of USD114mn in the previous week; month-to-date June outflows reached USD813mn, reversing May inflows of USD767mn.
- Emerging Markets-focused ETFs recorded inflows of USD1.814bn, close to USD1.941bn in the previous week; month-to-date June inflows reached USD2.871bn, slightly above USD2.485bn in May.
- Korean retail investors posted net purchases of only USD49mn in US portfolio assets from June 22 to 26, significantly below USD990mn in the previous week.
- Taiwan investors made net purchases of USD61mn in locally listed USD bond ETFs, improving from net sales of USD95mn in the previous week, but they still recorded net sales of USD1.088bn month-to-date in June.
Report interpretation
Overview
This Nomura FX Insights report focuses on high-frequency investor fund flows, tracking changes in offshore money flowing into US equity and bond funds, Emerging Markets ETFs, Korean retail purchases of US assets, and Taiwan investors' trading of USD bond ETFs. The core observation period is June 19 to 25, with some Korean data extending through June 26.
Core views
The report's core conclusion is that flows related to US equities remained positive, but cooled significantly from the previous week against the backdrop of volatility in global tech/AI stocks; US bond funds continued to see modest outflows; Emerging Markets ETF inflows remained relatively stable; Korean retail buying of US assets declined notably; and Taiwan USD bond ETFs briefly turned to small inflows, but still showed sizable net outflows month-to-date in June.
Analysis framework
The report uses a high-frequency fund flow framework, comparing the latest five trading days with the previous five trading days, and combining month-to-date June, May, and April data to assess the direction and strength of flows. Its flow proxy variables include US-focused ETFs and mutual funds listed or registered outside the US, Emerging Markets-focused ETFs listed outside Emerging Markets, Korean retail trading data, and flows into Taiwan locally listed USD bond ETFs.
Methodology notes
Use net inflows into ETFs and mutual funds to measure cross-border investment preferences
The report observes weekly, daily, and monthly flow changes to gauge shifts in investor risk appetite toward US equities, US bonds, and Emerging Markets assets.
US-focused funds listed or registered in non-US markets are mainly held by non-US investors
The report assumes these fund flows can serve as an approximate indicator of the direction of non-US retail and institutional inflows into the US equity market.
US-focused bond funds listed in non-US markets are mainly held by non-US investors
This assumption is used to estimate non-US investors' net buying or net selling of US bond funds.
Emerging Markets-focused funds listed outside Emerging Markets are mainly held by offshore investors
The report uses this measure to gauge the pace of offshore flows into Emerging Markets equity and bond ETFs.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- US-focused equity ETFs and mutual fundsOffshore funds are still flowing in, but weekly momentum has cooled significantly.
- Strengths
- Month-to-date June cumulative inflows reached USD11.480bn, above USD8.770bn in May.
- Weaknesses
- Inflows over the latest five trading days fell from USD3.897bn in the previous week to USD1.445bn.
- Comparison
- Compared with the previous week, the scale of inflows dropped by about two-thirds; compared with May, cumulative month-to-date June inflows remain relatively strong.
- Risks
- If volatility in global tech/AI stocks continues to intensify, inflows into US equity funds may slow further.
- US-focused bond ETFs and mutual fundsOffshore funds continue to post net outflows.
- Strengths
- The weekly outflow scale remains relatively limited.
- Weaknesses
- Month-to-date June outflows reached USD813mn, reversing May inflows of USD767mn.
- Comparison
- In contrast to the still sizable inflows into equity funds, demand for bond funds remains weak.
- Risks
- US rates, FX volatility, and shifts in duration preference may continue to suppress inflows into bond funds.
- Emerging Markets-focused ETFsFund inflows remain stable.
- Strengths
- Inflows over the latest five trading days reached USD1.814bn, close to USD1.941bn in the previous week; month-to-date June inflows are above May levels.
- Weaknesses
- Compared with the large inflows seen in January and February, current monthly inflows are clearly smaller.
- Comparison
- Emerging Markets equity funds are the main source of inflows month-to-date in June, while bond funds contribute less.
- Risks
- Dollar trends, global risk appetite, and local policy changes in Emerging Markets may affect future inflows.
- Korean retail allocation to US assetsNet buying remains positive, but weekly buying strength has dropped sharply.
- Strengths
- Month-to-date June has returned to net buying, ending consecutive net selling in April and May.
- Weaknesses
- Net purchases over the latest five trading days were only USD49mn, far below USD990mn in the previous week.
- Comparison
- Equity and bond purchases were roughly USD25mn each, showing relatively dispersed and weak allocation strength.
- Risks
- If US equity volatility rises or the appeal of USD assets declines, Korean retail inflows may continue to fall back.
- Taiwan locally listed USD bond ETFsWeekly flows turned slightly positive, but monthly flows remain clearly net outflows.
- Strengths
- Net purchases over the latest five trading days were USD61mn, improving from net sales of USD95mn in the previous week.
- Weaknesses
- Cumulative net sales month-to-date in June reached USD1.088bn.
- Comparison
- May recorded net purchases of USD176mn, while June reversed into net outflows.
- Risks
- Volatility in USD bond yields, FX expectations, and local investor redemption pressure may continue to affect flows.
Key data
- Total inflows into US-focused funds over the latest five trading daysUSD1.294bnJune 19 to 25; inflows into equity funds offset outflows from bond funds.
- Inflows into US-focused equity ETFs and mutual funds over the latest five trading daysUSD1.445bnVersus USD3.897bn in the previous week, indicating a clear slowdown in inflows.
- Month-to-date June inflows into US-focused equity ETFs and mutual fundsUSD11.480bnMay was USD8.770bn; June data are through June 25.
- Outflows from US-focused bond ETFs and mutual funds over the latest five trading daysUSD152mnPrevious week outflows were USD114mn.
- Month-to-date June outflows from US-focused bond ETFs and mutual fundsUSD813mnMay saw inflows of USD767mn, with June turning to net outflows.
- Inflows into Emerging Markets-focused ETFs over the latest five trading daysUSD1.814bnIncluding USD1.457bn into equity funds and USD357mn into bond funds; versus a combined USD1.941bn in the previous week.
- Month-to-date June inflows into Emerging Markets-focused ETFsUSD2.871bnMainly from Emerging Markets equity funds at USD2.247bn; total May inflows were USD2.485bn.
- Korean retail purchases of US portfolio assets over the latest five trading daysUSD49mnAbout USD25mn flowed into US equities and about USD25mn into US bonds; the previous week totaled USD990mn.
- Month-to-date June purchases of US portfolio assets by Korean retail investorsUSD757mnThis followed consecutive net selling in April and May.
- Inflows into Taiwan locally listed USD bond ETFs over the latest five trading daysUSD61mnThe previous week saw net outflows of USD95mn.
- Month-to-date June outflows from Taiwan locally listed USD bond ETFsUSD1.088bnMay saw a small net purchase of USD176mn, while June turned into notable net selling.
Impact & implications
The structure of fund flows shows that volatility in global tech/AI stocks has weakened the marginal momentum of flows into US equity funds, but has not yet triggered a broad withdrawal; Emerging Markets ETF inflows have remained resilient, suggesting that risk appetite has not deteriorated in parallel. By contrast, continued or month-to-date net outflows from US bond funds and Taiwan USD bond ETFs suggest that pressure remains from US rates, exchange rates, and bond allocation demand.
Risks
- Volatility in global tech/AI stocks may continue to weaken inflows into US equity funds.
- US rate and USD exchange-rate volatility may affect demand for US bond funds and USD bond ETFs.
- The fund flow proxy indicators rely on assumptions based on fund listing and registration locations and cannot fully identify the ultimate investor base.
- Month-to-date June data only run through June 25 or June 26, so monthly conclusions may change as end-of-month data are updated.
- This report is a macro and fund flow observation and does not constitute individual stock investment advice or a complete risk list.
What to watch
- Whether next week's inflows into US-focused equity ETFs and mutual funds remain below earlier highs.
- Whether US-focused bond funds can shift from month-to-date June net outflows back to net inflows.
- Whether the flow structure between equity funds and bond funds within Emerging Markets ETFs continues to diverge.
- Whether Korean retail net buying of US equities and bonds recovers from the low level of USD49mn.
- Whether the slight weekly inflow into Taiwan USD bond ETFs can reverse the month-to-date June net outflow trend.
- The impact of global tech/AI stock volatility, dollar moves, and rate changes on cross-border asset allocation.