Global equity funds draw big inflows as investors eye central bank signals

By Thomson Reuters Mar 15, 2024 | 8:13 AM

(Reuters) – Global equity funds saw notable inflows in the week to March 13 as investors focused on strong global stock performances, overlooking inflation concerns ahead of the Federal Reserve meeting next week that could provide clues on the timing of the central bank’s interest-rate cuts.

According to data from LSEG, global equity funds saw a net $22.63 billion worth of inflows during the week, the largest amount in a week since the first week of February 2022.

Wall Street was set to end marginally higher this week in spite of hotter-than-expected consumer prices and producer prices data pointing to sticky inflation.

“Equities continue to disregard moves in rates, as despite paring back of Fed rate cut pricing in recent months, the S&P500 is up 25% since its October trough,” said Chris Whelan, senior strategist at TD Securities.

“Furthermore, this comes alongside a broad-based cross-asset bull-run, with gold and bitcoin garnering much attention as they recently reached new highs.”

Regionally, European equity funds led with $15.07 billion in inflows, the most since Feb. 2, 2022. U.S. and Asian equity funds also saw substantial inflows of $4.93 billion and $2.11 billion, respectively.

Sector-wise, technology funds continued their growth trend, receiving $1.01 billion, marking the ninth consecutive week of inflows. Industrial and metals & mining sectors garnered $301 million and $222 million in inflows, respectively, while consumer discretionary sectors faced net outflows of $962 million.

Meanwhile, global money market funds remained in high demand for the third week in a row, with $35.51 billion in net purchases.

Global bond funds also continued their positive streak, attracting $7.27 billion in the 12th consecutive week of inflows. Within this segment, medium-term U.S. dollar bonds, global corporate, and government bond funds drew $2 billion, $1.78 billion and $475 million respectively.

In commodities, precious metal funds saw outflows diminish to an 11-week low of $122 million. Conversely, energy funds experienced their first weekly inflow in three weeks, at $25 million.

Emerging market funds, encompassing 29,721 funds, reported that bond funds received $473 million, breaking a four-week trend of outflows. Equity funds in these markets continued to see outflows, though reduced to $282 million from $1.72 billion the previous week.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Hugh Lawson)