Global equity funds record first weekly outflow in five weeks

(Reuters) -Global equity funds registered their first weekly outflow in five weeks through September 10 as investors locked in profits and trimmed their risk exposure.

Major equity markets hit fresh record highs this week, supported by expectations the U.S. Federal Reserve will deliver three rate cuts this year. But political uncertainty in France and Japan, and a rise in geopolitical tensions around the Middle East and Ukraine prompted a more cautious outlook.

According to LSEG Lipper data, investors withdrew a net $3.06 billion from global equity funds in the first week of net sales since August 6.

Outflows were driven by a net $10.44 billion in sales of U.S. equity funds, the most in five weeks. European and Asian funds drew net inflows of $3.77 billion and $1.87 billion, respectively.

Sectoral funds attracted a net $5.04 billion weekly inflow, the third straight week of net gains, with tech, healthcare and consumer discretionary funds drawing $3.59 billion, $709 million and $544 million, respectively.

Global bond funds saw around $18.18 billion of weekly net investment, with demand extending into a 21st successive week.

Global short-term bond funds drew a net $3.47 billion, the most since August 13. High-yield bond funds and euro-denominated bond funds received $3.08 billion and $1.66 billion, respectively.

Investors allocated $60.79 billion to the safety of money market funds, the most for a week since August 6.

Gold and precious metals commodity funds attracted a net $1.67 billion, with net inflows now recorded for 15 of the last 16 weeks.

In emerging markets, weekly net investments in equity funds jumped to a nine-week high of $2.18 billion. Bond funds drew a net $1.88 billion, data for a combined 29,674 funds showed.

(Reporting by Gaurav Dogra in Bengaluru; Editing by Kirsten Donovan)