Global equity funds attract robust weekly inflows, led by Asia

(Reuters) – Global equity funds experienced renewed interest from investors in the seven days through May 1, buoyed by a surge in inflows to Asia amid optimism about an economic recovery in the region, particularly in China.

Investors secured a net $4.86 billion worth of global equity funds during the week, marking their first weekly net buying since March 27, data from LSEG showed.

Regionally, Asian equity funds attracted a net $5.68 billion, marking the largest weekly inflow since March 27. Meanwhile, investors put $4.46 billion into European funds and withdrew $5.48 billion from U.S. funds.

Federal Reserve Chair Jerome Powell kept rates steady on Wednesday, indicating future rate cuts may be delayed due to persistent inflation.

“The delay in Fed cuts is likely to postpone rate cuts in Asian markets, but that does not derail an ongoing Asian export, industrial, and real growth recovery, thanks to a supportive U.S. economy and improving Chinese growth,” said Mark Haefele, chief investment officer of global wealth management at UBS.

“We see several areas of dip-buying opportunities in the region that investors can consider despite a return in market volatility.”

Among sector funds, technology received $408 million, marking its first weekly inflow in four weeks. Conversely, the healthcare and consumer discretionary sectors each faced net outflows of nearly $800 million.

At the same time, bond funds attracted $6.69 billion worth of inflows, the largest amount in a week since April 10.

Government bond funds had $1.54 billion worth of net purchases in contrast to $773 million worth of net selling in the previous week.

Loan participation and dollar-denominated mortgage bond funds drew inflows of $1.58 billion and $1.34 billion, respectively. Additionally, inflation-linked bonds received $532 million, the largest inflow since July 2023.

Money market funds acquired about $8.14 billion in inflows, marking the first weekly net purchase in four weeks.

Among commodities, investors shed $401 million worth of precious metal funds, posting the third weekly outflow in four weeks. Energy funds saw a marginal $11 million worth of net buying.

Data covering 29,511 emerging market funds showed a net outflow of $769 billion from bond funds during the week, the third straight week of withdrawal. Equity funds, however, received about $74 million in net purchases.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by Christina Fincher)