Global equity funds see fourth week of inflows on Fed rate cut hopes

GLOBAL equity funds remained in demand for a fourth successive week, amid optimism over talks of rate cuts from a Federal Reserve official, although caution ahead of data on US consumer spending capped inflows.

Investors poured a net US$2.25 billion into global equity funds in week ended Nov 29, although it was the lowest amount in a week since Nov 1, LSEG data showed.

Investors focused on Tuesday’s comments by Fed governor Christopher Waller – an influential and previously hawkish voice, who said rate cuts could begin in months if inflation keeps easing.

Investors pumped US$6.01 billion into European equity funds, the biggest weekly net purchase since Feb 1. However, US and Asian funds suffered outflows of US$3.31 billion and US$1.14 billion, respectively.

Meanwhile, equity sector funds recorded a net US$2.34 billion in outflows during the week, the first weekly net selling in three.

The tech sector faced a US$2.27 billion outflow after three successive weeks of net purchases. Investors also withdrew US$671 million from the healthcare sector, while securing about US$459 million worth of financial sector funds.

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Global bond funds also drew in about US$2.4 billion, the fourth consecutive weekly inflow.

Global high-yield bond funds attracted about US$1.05 billion, their fourth weekly inflow. government and corporate bond funds also received about US$1.02 billion and US$392 million, respectively.

Meanwhile, the global money market saw a substantial surge in demand as they received US$6.33 billion on a net basis, the biggest weekly inflow in four weeks.

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As inflation cools, Fed officials signal rate hikes likely done

Elsewhere, data for commodity funds showed investors pulled about US$444 million out of precious metal funds, marking the first weekly outflow in five. Energy funds, meanwhile, saw a modest US$43 million in inflows.

Data covering 28,665 emerging markets funds revealed that investors extended selling in equity funds into a 16th consecutive week, shedding a net US$1.41 billion. EM bond funds also recorded outflows worth US$771 million compared with US$771 million in net purchases a week ago. REUTERS