Solid flows into global equity funds on hopes of end to US rate hikes

Global equity funds attracted robust inflows in the seven days leading to November 22, spurred by growing expectations that the US Federal Reserve will stop raising interest rates amid signs of easing inflation.

Investors purchased a net $9.13bn worth of global equity funds during the week, after about $10.96bn worth of net accumulations in the prior week, LSEG data showed.

European equity funds saw substantial inflows, attracting about a net $4.28bn, the highest weekly amount since February 1.

US funds also performed well, securing $6.27bn, but there was a notable shift in Asia, where $2.24bn was withdrawn, ending a 24-week buying streak.

The technology sector continued to draw strong interest, with funds receiving $2.33bn net, the highest since mid-December 2021. In contrast, healthcare and utilities sector funds saw outflows of $648m and $379m, respectively.

Global bond funds, while still in demand, attracted a more modest $2.94bn, the lowest in three weeks. Inflows were distributed across global government and corporate bond funds, which drew $1.75bn and $1.32bn, respectively.

Demand for high yield bond funds, meanwhile, fizzled out during the week as they received just $1.13bn, compared with over $5bn worth of net purchases in each of the previous two weeks.

Global money market funds received about $28.3bn during the week, their fifth weekly inflow in a row.

Data for commodity funds revealed energy funds had $154m worth of outflows, the first weekly net selling in five weeks. Meanwhile, precious metal funds gained $512m in inflows, the most in three weeks.

Data for emerging markets, factoring in 28,665 funds, highlighted that bond funds received about $777m, their second weekly inflow in three weeks.

Equity funds, however, suffered a 15th straight week of outflow, with about $272m in net outgo.

Reuters