Global equity funds draw big inflows as inflationary pressures ease

GLOBAL equity funds attracted substantial inflows in the week ending Sep 13, buoyed by hopes the Federal Reserve might halt its rate increases amidst easing inflationary concerns, potentially boosting risk assets.

According to LSEG data, investors channelled approximately US$9.95 billion into global equity funds, marking the most substantial net weekly acquisition since Jun 14.

Breaking it down regionally, US and Asian equity funds had inflows of roughly US$9.7 billion and US$1.62 billion, respectively. However, European funds were hit with outflows, shedding US$662 million.

By sector, consumer discretionary funds saw an influx of about US$867 million and tech sector funds garnered around US$474 million. Other sector-focused fund remained out of favour.

Last month’s US consumer prices saw their steepest rise in 14 months due to escalating petrol costs, yet the year-on-year core inflation increase was the smallest in almost two years, which could potentially provide some leeway for the Federal Reserve to keep interest rates unchanged at its upcoming Wednesday meeting.

Contrastingly, the allure of global money market funds appeared to wane. They registered a net intake of US$10.65 billion, a sharp decline from the US$60.5 billion in the preceding week.

SEE ALSO

Global economy to ‘catch its breath’ in Q4 as monetary policy weighs on demand: BNP Paribas

Leading investor-focused groups call for ‘urgent course correction’ in climate policy

Global sovereign debt roundtable to meet on local debt restructuring: sources

Global business activity showed signs of slowdown in August: PMIs

More

Global bond funds recorded US$531 million in outflows, a reversal from the inflows seen over the past three weeks. High-yield funds reported around US$899 million in outflows, breaking their two-week buying streak. But both corporate and government bond funds observed inflows, netting US$1.09 billion and US$831 million, respectively.

Among commodities, precious metal funds continued their selling trend into a 16th week with US$454 million in outflows. Energy funds also experienced a dip, registering US$128 million in outflows, marking a shift from the previous two weeks of net purchases.

Data covering 28,218 emerging market funds highlighted a net exit of US$1.95 billion from equity funds. Bond funds in these markets also faced headwinds, with a disposal of approximately US$795 million, marking their seventh consecutive week of net selling. REUTERS