Global equity funds see big inflows amid stock rally

By Thomson Reuters Feb 16, 2024 | 5:54 AM

(Reuters) – Global equity funds racked up significant inflows in the week to Feb. 14 propelled by investor optimism amid a robust stock market rally, despite lingering uncertainties over the Federal Reserve’s rate cut plans.

According to data from LSEG, investors acquired a net $9.12 billion worth of global equity funds during the week, marking their largest weekly net purchase since Dec. 27, 2023.

Investors raised their holdings as global stocks rallied to their two-year peaks this week.

The MSCI world stock index overcame a 1.1% dip early in the week, driven by a higher-than-expected U.S. inflation reading, to hit a new two-year peak of 752.55 on Friday.

The U.S. equity funds received $6.78 billion, the biggest weekly inflow in seven weeks.

Investors also purchased about $1.74 billion worth of Asian equity funds but sold European funds of a net $151 million.

Among sector funds, tech received $2.66 billion in a fifth successive week of net buying. Industrials and consumer discretionary sectors also drew about $277 million and $242 million, respectively.

Meanwhile, global bond funds garnered about $11.25 billion in net purchases, extending inflows into an eighth consecutive week.

Corporate bond funds drew $2.47 billion, the biggest inflow in four weeks, while government, and loan participation funds secured about $1.72 billion and $467 million, respectively, in net purchases.

At the same time, investors offloaded $41.48 billion worth of money market funds after two weeks of net buying in a row.

In commodities, investors withdrew $654 million out of precious metal funds, extending outflows into a seventh successive week. Energy funds also witnessed about $77 million worth of net selling.

Data covering 28,577 emerging market funds showed equity funds received $382 million, the first weekly inflow in five weeks, while bond funds had outflows, worth about $85 million on a net basis.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Gareth Jones)