Global Equity Funds See Significant Inflows Amid Rate Cut Hopes

(Reuters) -Global equity funds drew their biggest weekly inflows in three weeks in the period to September 3, lifted by growing expectations of a Federal Reserve rate cut this month and a favorable antitrust ruling for Alphabet that buoyed sentiment.

Investors poured a net $10.65 billion into global equity funds, the largest weekly purchase since August 13, data from LSEG Lipper showed.

Signs of a cooling U.S. labor market and dovish remarks from Fed officials have strengthened bets on policy easing.

Markets are pricing a 99.7% likelihood of a quarter-point Fed rate reduction this month, CME's Fed Watch tool showed.

By region, European equity funds attracted $3.85 billion, up from $1.32 billion the previous week. Asian funds took in $3.3 billion, while U.S. equity funds saw $2.42 billion in net inflows.

Technology led sector allocations with $1.87 billion, the biggest weekly intake since August 13. Financials and gold and precious metals funds also drew strong interest, with net inflows of $1.16 billion and $1.07 billion, respectively.

Fixed income remained in favor. Global bond funds posted a 20th straight week of net inflows, totaling $18.74 billion. Euro-denominated bond funds drew $2.61 billion, the most since August 13.

Corporate bond funds gained $2.13 billion, and short-term bond funds added $1.82 billion.

Flows into money market funds jumped to a four-week high, with $57.59 billion in net new money.

Commodity funds tied to gold and precious metals recorded $5.2 billion in inflows, the highest weekly haul since at least November 2021.

In emerging markets, equity funds gained a net $1.05 billion weekly inflow, the most since July 30. Investors also bought bond funds of a net $2 billion, based on data from 29,699 funds.

(Reporting by Gaurav Dogra in Bengaluru; Editing by Tasim Zahid)