Global equity fund inflows cool to a five-week low on AI concerns.

Global equity fund inflows eased ⁠to ⁠a five-week low in the ⁠seven days to February 25 as investors turned cautious amid ​growing unease over the heavy costs and potential disruption linked to artificial intelligence.

Investors bought a ‌net $19.75 billion worth of global ‌equity funds, marking the smallest weekly inflow since $9.55 billion in the week to ⁠Jan. 21, ⁠LSEG Lipper data showed.

Nvidia shares dropped 5.46% on Thursday, while the ​Nasdaq Composite Index shed 1.2% after Nvidia’s earnings report showed that fourth-quarter revenue growth slowed, despite beating analysts’ estimates.

“We believe big market moves in recent months should be a trigger ​to review portfolios,” said Mark Haefele, chief investment officer at UBS Global Wealth ⁠Management.

“Higher-than-expected capital ⁠expenditure and rising competition ⁠have raised ​uncertainty in the AI field, making selectivity and diversification more important.” 

European equity funds saw ​weekly inflows of $11.69 billion ⁠after a net $18.61 billion purchase in the prior week. Asian and U.S. funds drew net inflows of $3.22 billion and $2.01 billion, respectively.

Sectoral funds had a mixed set of data as industrials, and metals and mining secured net inflows of $1.5 billion and $1.02 billion, ⁠respectively, while financials and tech faced outflows of $2.55 billion and $257 million, respectively.

Inflows into ⁠bond funds, meanwhile, cooled to a five-week low of $12.68 billion.

The short-term bond funds segment received $1.25 billion, the smallest weekly net since January 21. Euro-denominated bond funds and corporate bond funds had inflows of $2.2 billion and $1.4 billion, respectively.

Money market funds saw the largest weekly net purchase in three weeks, at approximately $19.97 billion.

Gold and precious metals commodity funds saw a surge in demand in the most recent week as these funds drew $5.57 billion worth of inflows, ⁠the largest amount since October 22.

In emerging markets, equity funds remained popular for the 10th straight week as these funds drew net investments of $11.86 billion. Investors also pumped $3.13 billion into bond funds, data for a combined 28,718 ​funds showed.

The United States and Israel launched strikes on Iran on Saturday that ⁠killed ⁠Supreme Leader Ali Khamenei and plunged the Middle ⁠East into a new conflict.

The strikes put nearby oil-producing Gulf Arab countries on edge as fear of escalation ​grew with Iran responding by launching missiles towards Israel.

Some oil majors and top trading houses suspended crude oil and fuel shipments via the Strait of Hormuz because of ‌the attacks, four trading sources said on Saturday.    

“The ultimate oil price impact of today’s military action will likely hinge on whether the IRGC folds in the face of ⁠the aerial onslaught ⁠or if it pursues further escalatory actions to appreciably raise the costs of Washington’s second regime change ​operation in a little over two months.”

“It is our understanding that regional leaders warned Washington about the contagion risks of another confrontation with Iran and indicated that $100+/bbl oil was a clear and present danger.”