Over the past five weeks, global emerging‑market (GEM) funds attracted a cumulative $11.8 billion in new money, wiping out roughly 90 percent of the $13 billion that left the market between May and July.
U.S. funds also enjoyed inflows for a third straight week, driven mainly by direct country allocations and, to a lesser extent, global‑mandated funds.
In contrast, semiconductor‑focused funds are showing early signs of profit‑taking. Their flows peaked at about $45 billion during June and July as the sector’s index entered its final rally phase.
After the index topped out, the last two weeks saw around $5 billion in redemptions, indicating that many investors who entered during the late‑cycle surge are now locking in gains.
Nearly 80 percent of the total inflows into semiconductor funds since the AI rally began in April 2025 came in June and July, underscoring how fresh capital fueled the recent surge.
The divergence is most evident in Taiwan, where foreign inflows remain positive but domestic funds experienced a $1 billion outflow—the largest since September 2025—highlighting a growing split between foreign and local positions.
India’s situation mirrors this trend. Foreign outflows have eased, partly due to inflows into India‑focused ETFs, yet long‑only funds continue to sell aggressively, having withdrawn about 65 percent of the capital they received in 2023‑24.
US‑based ETFs are beginning to support the market, while investors from Japan and Luxembourg have already pulled 50‑60 percent of their 2022‑24 investments. A full reversal in foreign flows is still pending.
The shift reflects a broader re‑evaluation of the AI and semiconductor rally, with risk appetite toward emerging markets rebounding but capital rotating away from late‑cycle semiconductor plays.
Gold and silver, meanwhile, remain attractive, with gold drawing a six‑month high of $5.8 billion in weekly inflows and silver following suit.