Escalating conflict between the US and Israel with Iran has heightened inflation concerns and dampened risk appetite, leading global investors to reduce their holdings in equity funds for the first time in eight weeks as of March 4. According to LSEG Lipper data, US stock funds were hit the hardest, with net sales reaching $21.92 billion during the week, marking the largest weekly outflow since January 7 and contributing to an overall net outflow of approximately $1.44 billion from global equity funds. The widening Middle East conflict has raised fears of disruptions to global oil supplies, putting pressure on stock markets and intensifying concerns about inflation and potential delays in interest rate cuts by the Federal Reserve. The MSCI World Index fell more than 2.5% over the week, on track for its worst weekly performance since early April 2025. Meanwhile, inflows into European equity funds slowed to $8.8 billion, down from about $11.88 billion the previous week, while Asian funds attracted net inflows of $7.43 billion. By sector, industrial and energy funds recorded net inflows of $2.53 billion and $1.21 billion, respectively, whereas financial sector funds saw outflows of approximately $1.9 billion. Safe-haven demand drove net inflows into money market funds to $20.22 billion, largely unchanged from the prior week. Investors also allocated $16.12 billion to global bond funds, marking the ninth consecutive week of net purchases. Inflows into short-term bond funds surged to $3.62 billion, up from around $1.23 billion the week before. Euro-denominated bond funds and corporate bond funds also posted significant net inflows of $2.31 billion and $2.09 billion, respectively. On the other hand, investors sold approximately $2.62 billion worth of gold and other precious metal commodity funds, marking the second week of net selling in eight weeks. In emerging markets, data showed that the overall inflow into equity funds tracked across 28,803 funds fell to $5.3 billion, an eight-week low, while net purchases of bond funds slowed to $2.5 billion from about $3.04 billion the previous week.