Global Equity Funds Log Strong Inflows as Earnings and Fed Signals Boost Sentiment
Market Overview and Fund Flows
Equity Fund Inflows Driven by Earnings and Economic Data
Aug 14 (Reuters) – Global equity funds attracted inflows for a 12th consecutive week through August 12, buoyed by optimism over a strong earnings season and data showing weaker-than-expected U.S. payroll growth and easing inflation, which tempered expectations of a Federal Reserve rate hike.
Investors bought a net $18.62 billion in global equity funds during the week, slightly more than the previous week’s $17.27 billion in net purchases, LSEG Lipper data showed.
Performance of Major Indices and Companies
The MSCI All-Country World Equity Index, which hit a record high of 1,163.05 on Wednesday, rose 2.85% last week—its best weekly performance since April 17—bolstered by strong earnings from AI-related companies such as Caterpillar and Palantir.
Federal Reserve and Economic Indicators
A U.S. Labor Department report on Thursday showed that producer prices were unchanged in July, reinforcing expectations that the Federal Reserve could leave interest rates unchanged next month.
Regional and Sectoral Fund Flows
Regional Equity Fund Inflows
By region, European equity funds attracted $13.52 billion, their largest weekly net inflow since July 8. U.S. and Asian equity funds also recorded inflows of $2.58 billion and $4.13 billion, respectively.
Sectoral Movements
Investors, meanwhile, withdrew about $1.7 billion from technology-sector funds, ending a six-week run of net purchases. They, however, bought $1.6 billion in gold and precious metals equity funds and $609 million in consumer staples sector funds.
Bond and Money Market Fund Trends
Bond Fund Inflows
Weekly net investment in bond funds jumped to a four-week high of $18.01 billion during the week.
Short-Term and Specialized Bond Fund Activity
Short-term bond funds, euro-denominated bond funds, government bond funds and loan participation funds saw significant buying interest, attracting inflows of $4.45 billion, $2.57 billion, $2.24 billion and $1.06 billion, respectively.
Money Market Fund Performance
Money market funds also attracted net investments of $28.41 billion, extending their inflow streak to a second consecutive week.
Commodity and Emerging Market Fund Activity
Commodity Fund Flows
Among commodity funds, investors bought a net $2.62 billion in gold and other precious metals funds, remaining net buyers for a fifth straight week. Energy funds, meanwhile, recorded their first weekly inflow in three weeks, at $434 million.
Emerging Market Fund Trends
Data covering 28,966 emerging-market funds showed that equity funds attracted net inflows of $3.45 billion for a fifth straight week, while bond funds received net investments of $871 million.
(Reporting by Gaurav Dogra)