Global equity funds attract inflows for a fifth consecutive week

Global Equity Fund Inflows Climb for Five Consecutive Weeks on Strong Earnings

Overview of Recent Global Fund Flows

Oct 23 (Reuters) - Global equity funds attracted inflows for a fifth consecutive week in the week through October 21, as easing Treasury yields and strong early corporate earnings lifted investor sentiment.

Global equity funds drew net inflows of $28.16 billion during the week, compared with $19.88 billion in the previous week, LSEG Lipper data showed.

Market Drivers and Investor Sentiment

The benchmark 10-year US Treasury yield fell about 15 basis points last week and dropped below the psychologically significant 5% level this week.

Fund investors were encouraged by better-than-expected corporate earnings so far this reporting season.

Corporate Earnings Performance

Of the nearly 18% of MSCI All Country World Index constituents that have reported earnings to date, about 73% have exceeded the average analyst estimate, according to LSEG data.

Market Reactions to Earnings Reports

The MSCI World Index, however, fell 1.31% on Thursday after Meta reported strong results on Wednesday but unveiled plans to issue non-voting stock, reviving concerns about its growing capital commitments.

Regional and Sectoral Fund Flows

Regional Inflows

By region, Asian equity funds attracted $11.53 billion, their largest weekly inflow since at least December 2022. Investors also added $9.14 billion to European equity funds and $5.07 billion to US equity funds.

Sectoral Trends

Among sectoral funds, technology attracted $5.05 billion, reversing net sales of $4.77 billion in the previous week. Investors also bought $1.83 billion in healthcare sector funds but sold a notable $1.29 billion in consumer discretionary sector funds.

Bond and Money Market Fund Activity

Bond Fund Inflows and Outflows

Global bond funds remained popular for a fifth consecutive week, attracting net inflows of $9.44 billion.

Currency and Duration Preferences

Swiss franc-denominated bond funds drew $6.8 billion, their largest weekly inflow since at least November 2024. Investors also added a significant $2.78 billion to short-term bond funds, while pulling $1.68 billion from high-yield bond funds and $550 million from government bond funds.

Money Market Trends

Money market funds attracted weekly net inflows of $15.86 billion, following net outflows of $47.51 billion the previous week.

Commodity and Emerging Market Fund Flows

Commodities

Among commodities, gold and other precious metals funds attracted net inflows of $1.29 billion, marking their fifth week of net purchases in the past six weeks. Investors also added $41.5 million to energy funds.

Emerging Market Funds

Data covering 29,174 emerging market funds showed that investors bought $6.28 billion worth of equity funds — the largest weekly net purchase since August 5. However, they withdrew a marginal $48.72 million from bond funds.

(Reporting by Gaurav Dogra;Editing by Alison Williams)