Global equity funds attract inflows on hopes for end to Fed rate rises

Global equity funds attract inflows on hopes for end to Fed rate rises

(Reuters) – Global equity funds attracted robust inflows in the seven days leading to Nov. 22, spurred by growing expectations that the U.S. Federal Reserve will stop raising interest rates amid signs of easing inflation.

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

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

U.S. funds also performed well, securing $6.27 billion, but there was a notable shift in Asia, where $2.24 billion was withdrawn, ending a 24-week buying streak.

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

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

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

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

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

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

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

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill)