Europe buys the U.S. again, global equity and bond funds maintain net inflows

Overview

Goldman Sachs' weekly fund flow report tracks global mutual fund and related investment product flows through May 20. The core conclusion is that both equities and fixed income continued to see positive inflows, cross-border flows were positive overall, and risk sentiment remained supported. U.S. fund demand was strong, Europe bought U.S. assets again, especially U.S. Treasury funds; at the same time, fund flow performance diverged clearly across emerging markets, regions, and sectors.

Core views

First, the U.S. remains an important destination for global capital allocation, with both U.S. equity funds and U.S. bond funds receiving support from overseas investors, and eurozone inflows into U.S. Treasury funds especially notable. Second, equity funds remained net positive overall, but momentum slowed materially versus the prior week, and the structure was led by global benchmark funds and U.S. funds. Third, fixed-income inflows were more stable, with government bonds, aggregate bonds, short-duration bonds, and inflation-protected bond funds all receiving support. Fourth, regionally, Korea, Brazil, and Taiwan have seen strong year-to-date equity flows, while mainland China, India, U.K.-specific funds, and some emerging-market funds remain under pressure. Fifth, at the sector level, technology funds attracted the largest inflow for the week, while financials recorded the largest outflow.

Analysis framework

The report is based on mutual fund subscription and redemption data, segmented by asset class, region, sector, fund domicile, and flow direction to observe equity, bond, money market, and cross-border FX-related flows. The charts also combine cumulative flows, 4-week moving averages, 1-year moving averages, and inflow measures as a share of AUM to compare the relative strength of allocations across regions and sectors.

Methodology notes

• fund_flow_analysisWeekly fund flow tracking

  Measures investor allocation direction using net inflows and outflows in mutual funds and related investment products.

  The report separately tracks equity, fixed income, money market, and cross-border flows, and breaks them down by region, sector, fund domicile, and duration category to assess changes in risk appetite and asset allocation.

• cross_border_flowCross-border fund flows and FX flow methodology

  Observes flow direction by underlying fund domicile and excludes hard-currency emerging market bond funds and FX-hedged products.

  This methodology is used to measure unhedged cross-border equity and fixed-income fund flows and is useful for assessing currency management, dollar demand, and regional capital preferences.

• trend_smoothing4-week moving average and 1-year moving average

  Uses short-term and long-term moving averages to separate near-term volatility from persistent trends.

  Regional charts for Korea, the U.S., Japan, the Euro Area, Brazil, and Mainland China use 4-week moving averages and 1-year moving averages to show changes in foreign inflows, helping identify short-term reversals and medium-term trends.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• U.S. equity funds

  benefiting from global inflows and strong demand

  Strengths

  The report says demand for U.S. funds is strong, and the 4-week moving average of foreign inflows into the U.S. remained positive in 2026.

  Weaknesses

  Weekly net inflows into equity funds slowed materially versus the prior week, with weaker short-term momentum.

  Comparison

  Compared with most developed-market and emerging-market aggregate categories, U.S. equity fund flows are more resilient, but on an AUM basis they are not the strongest; Korea and Brazil stand out more.

  Risks

  If risk appetite fades or the U.S. dollar strengthens again, the pace of overseas allocation to U.S. equity funds could slow.

• U.S. Treasury funds

  clearly benefiting from eurozone allocation

  Strengths

  Eurozone-domiciled funds have accumulated roughly $11 billion of inflows year to date, and inflows into government bond funds broadly support fixed income.

  Weaknesses

  Asia-domiciled funds have accumulated outflows of about $5 billion to $6 billion from U.S. Treasury funds, showing inconsistent regional demand.

  Comparison

  Eurozone and Asian flows point in opposite directions, with the European bid for U.S. Treasuries clearly stronger.

  Risks

  Interest-rate volatility, U.S. dollar moves, and changes in hedging costs could alter cross-border bond fund flows.

• Global fixed-income funds

  supported by inflows into government bonds, aggregate bonds, short-duration bonds, and inflation-protected bond funds

  Strengths

  Inflows are broad-based, with government bond and aggregate bond funds as the main support, while short-duration and inflation-protected bond funds also continue to attract money.

  Weaknesses

  Hard-currency emerging market bond funds saw net outflows, indicating constraints on credit and foreign-currency bond demand.

  Comparison

  Compared with equity funds, fixed-income inflows are more defensive and allocation-driven.

  Risks

  Inflation expectations, term premia, and policy-rate changes could affect sustained inflows.

• Korea equity funds

  a strong beneficiary of regional flows

  Strengths

  Korea equity funds returned to net inflows and are up about 38% of AUM year to date, among the strongest in the region.

  Weaknesses

  The 4-week moving average of foreign inflows into Korea turned negative in the latest reading after peaking earlier in 2026, pointing to some near-term pullback.

  Comparison

  Korea is clearly stronger than mainland China, India, U.K.-specific funds, and most developed-market aggregate categories.

  Risks

  If the short-term reversal in foreign flows persists, the earlier momentum could unwind.

• Mainland China equity funds

  under flow pressure

  Strengths

  Longer-term charts show several large inflow episodes in 2024–2025, and some foreign flow indicators modestly recovered in 2026.

  Weaknesses

  The report says mainland China equity funds posted net outflows, and YTD flows are about -22% of AUM, the largest outflow in the region.

  Comparison

  It is significantly weaker than Korea, Brazil, Taiwan, and the U.S., and moves in the same direction as global emerging-market fund outflows.

  Risks

  If outflows continue, they could weigh on valuation recovery and risk appetite.

• Technology sector funds

  the largest sector net inflow for the week

  Strengths

  The report explicitly states that technology sector funds recorded the largest net inflow among sectors.

  Weaknesses

  The 4-week moving-average chart shows technology inflows easing from a high in around April 2026 to near zero, indicating volatile short-term momentum.

  Comparison

  Performance this week was stronger than financials, but on a YTD AUM basis industrials, energy, and infrastructure are stronger.

  Risks

  If growth style cools or valuation pressure rises, tech fund inflows could reverse quickly.

• Financials sector funds

  the largest sector net outflow for the week

  Strengths

  Financials still show some positive cumulative inflows in the total global sector flow data.

  Weaknesses

  The report says financial funds recorded the largest net outflow at the sector level.

  Comparison

  They are clearly weaker than technology in the short term, and on a YTD AUM basis they also trail industrials, energy, and infrastructure.

  Risks

  Changes in rates, the credit cycle, and bank earnings expectations may continue to affect flows.

Key data

• Global equity fund net inflows for the week+about $2 billionThe prior week was about +$20 billion, indicating inflows remained positive but slowed week over week.
• Global fixed-income fundsNet inflows supportedInflows into government bond funds and aggregate bond funds were the main support.
• Money market fund assets+$1 billionThe report says money market fund assets increased by about $1 billion.
• Cumulative inflows into Eurozone-domiciled U.S. Treasury fundsabout +$11 billionThe chart shows a significant rise in cumulative inflows from the start of 2025 through May 2026.
• Cumulative outflows from Asia-domiciled U.S. Treasury fundsabout -$5 billion to -$6 billionThe same chart shows Asia-domiciled capital has continued to post cumulative outflows since the start of 2025.
• 4-week moving average of foreign inflows into the U.S.about +$8 billion to +$9 billionThe chart shows the 2026 short-term average of foreign inflows into the U.S. remained positive.
• Year-to-date inflows into Korea equity fundsabout +38% of AUMThe regional YTD chart shows Korea as the strongest inflow region.
• Year-to-date outflows from Mainland China equity fundsabout -22% of AUMThe regional YTD chart shows Mainland China as the largest outflow region.
• Year-to-date inflows into Industrials sector fundsabout +21% to +22% of AUMThe sector YTD chart shows Industrials as one of the strongest inflow sectors.
• Year-to-date outflows from Consumer Staples sector fundsabout -5% of AUMThe sector YTD chart shows Consumer Staples as a relatively weaker sector.

Impact & implications

The flow data point to still-supported global risk appetite, but not a uniform, broad-based shift into risk assets. U.S. assets continue to attract overseas capital, especially as eurozone allocation to U.S. Treasury funds strengthens, which may reflect more stringent FX management after the energy shock and a dollar environment trading within a relatively tight range, while investors remain willing to hold dollar assets. On the equity side, U.S. and global benchmark products are benefiting, but there is clear divergence within emerging markets: Korea, Brazil, and Taiwan are stronger, while mainland China and India are weaker. At the sector level, technology attracted the largest short-term inflow, while financials saw the largest outflow, suggesting investor preference continues to rotate quickly among growth, cyclical, and defensive exposures.

Risks

• Fund flow data reflect subscription and redemption direction, not fundamental improvement or guaranteed price returns.
• Several chart values in the report are visual approximations and lack exact data labels; avoid overinterpreting small differences.
• Although equity fund inflows are positive, they slowed materially versus the prior week, so short-term risk appetite may remain unstable.
• Regional divergence is pronounced; mainland China, India, U.K.-specific funds, and some emerging-market funds remain under outflow pressure.
• Fixed-income flows are highly sensitive to rates, FX, hedging costs, and inflation expectations, so cross-border allocation direction may change quickly.
• Goldman Sachs disclosure notes that this research does not constitute personalized investment advice; prices and investment values may fluctuate, and past performance is not indicative of future results.

What to watch

• Whether U.S. equity funds and U.S. Treasury funds continue to attract eurozone inflows.
• Whether cumulative outflows from Asian capital to U.S. Treasury funds widen or reverse.
• Whether global equity fund net inflows can reaccelerate from about $2 billion this week.
• Whether the strong flow into Korea equity funds persists, especially as the latest short-term foreign flow has turned negative and recovery is being watched.
• Whether the sharp YTD outflows from mainland China equity funds stabilize and turn to inflows.
• Whether strong inflows into technology funds continue and financials outflows ease.
• Whether inflows into short-duration bonds, inflation-protected bonds, and government bond funds indicate further strengthening of defensive allocation.