US technology funds have attracted a record $12.3 billion in weekly inflows, the largest since comparable records began in 2017, as investors increased their exposure to artificial intelligence and semiconductor stocks. This follows a $9 billion intake in the previous week and marks the longest sequence of US equities inflows (11 consecutive weeks) since December 2025. The capital is being concentrated in areas directly tied to AI infrastructure, such as chipmakers and large technology companies.
Conversely, emerging market funds have experienced sustained withdrawals, with global emerging market funds losing nearly $10 billion over six consecutive weeks. India, in particular, recorded heavy foreign selling, with $770 million in withdrawals during the week ended June 10, including $460 million from dedicated India funds. Foreign investors also removed approximately $4.9 billion from Indian equities in May, bringing total withdrawals for the first five months of 2026 to over $26 billion, surpassing the total removed in all of 2025.
India's performance relative to broader emerging market funds has also weakened significantly, with its one-year relative underperformance at 48%, the lowest on record. This is partly attributed to India's less direct exposure to semiconductor manufacturing and large-scale AI infrastructure compared to countries like the United States, South Korea, and Taiwan, which are direct beneficiaries of current tech-led market trends. Despite the outflows, the pace of monthly withdrawals from emerging markets has shown some easing from earlier peaks.
In a broader context, US equity funds attracted a net $7.43 billion in the week to June 3, with the technology sector being particularly popular, drawing $6.62 billion. Separately, in the week to May 27, US equity funds drew $1.97 billion, with technology sector funds attracting $2.75 billion for an eighth consecutive week of buying. Bond funds also saw significant inflows, with $9.66 billion in the week to June 3 and $10.62 billion in the week to May 27, extending their net purchases for several consecutive weeks.
