Global equity funds see robust inflows as investors bet on growth, ignore political turmoil
Global equity funds saw a notable rise in inflows in the week through Dec. 4, driven by a record-setting rally fueled by strong U.S. economic growth prospects and optimism about tech stocks, despite political turmoil in France and South Korea.
Investors pumped a robust $21.8 billion into global equity funds during the week, the biggest amount since Nov. 13, LSEG Lipper data showed.
U.S. equity funds led with net inflows of $8.85 billion, while European and Asian equity funds also saw substantial inflows, receiving $5.92 billion and $4.58 billion respectively.
“The underlying strength of the U.S. economy and further interest rate cuts should provide additional momentum,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Despite economic hurdles in the euro zone, the European Central Bank is expected to make its fourth rate cut of 2024 this month due to slowing inflation, with continued easing expected through June 2025, fostering a favorable environment for reasonably valued European stocks, he said.
By sector, financials and industrials attracted a noticeable $813 million and $573 million, respectively. The healthcare and technology sectors, meanwhile, witnessed outflows totaling a net $790 million and $620 million, respectively.
Global bond funds were popular for the 50th successive week with net investments worth $10.82 billion during the week.
High yield, dollar denominated medium-term and loan participation funds stood out as these funds drew $1.69 billion, $1.43 billion and $880 million, respectively in inflows.
Global money market funds, meanwhile, saw a net $169.4 billion worth of purchases, the largest for a week since early April 2020.
Among commodities, gold and precious metal funds lost a marginal $65 million in outflows following two weekly inflows in a row. Energy funds, meanwhile, gained $78 million worth of inflows.
Data covering 29,635 emerging market funds showed that weekly outflows for equity funds eased to a four week low of $834 million during the week. In parallel, bond funds saw their first weekly inflow in seven weeks, to the tune of $872 million on a net basis.
