Global equity funds draw inflows on economic growth hopes

7:02 am Friday, June 30th, 2023

(Reuters) – Global investors turned net buyers of equity funds in the week to June 28 as solid economic readings fuelled hopes of U.S. growth, while China’s policy measures to bolster its economy further boosted sentiment.

According to Refinitiv Lipper data, global equity funds saw a net $2.81 billion in inflows after booking about $15.96 billion worth of outflows in the previous week.

Robust readings on new U.S. home sales and consumer confidence helped soothe investors’ worries over a looming recession as the Federal Reserve seeks to cool demand to tame inflation.

Chinese Premier Li Qiang said this week China would take steps to boost demand, invigorate markets and promote development, and added that its economic growth in the second quarter would be higher than the first quarter.

The U.S. and Asian equity funds attracted $2.1 billion and $1.16 billion, respectively, in inflows, while European funds saw about $1 billion worth of net outflows.

Sectoral equity funds, however, suffered net selling of $1.38 billion, with materials and consumer staples losing $530 million and $373 million, respectively, while utilities saw $303 million in outflows.

Meanwhile, global bond funds drew $6.95 billion in net purchases after posting about $857 million in outflows in the previous week.

Global government bond funds received a net $3.1 billion, the biggest inflow in five weeks. Investors also purchased $786 million worth of corporate bond funds but sold $1.04 billion of high-yield funds.

Money market funds recorded outflows for a third straight week, amounting to a net $31.68 billion.

Data for commodity funds showed that investors offloaded $728 million worth of precious metal funds in their fifth straight week of net selling. Energy funds also booked outflows of about $193 million.

Meanwhile, demand for emerging market funds sustained for a third successive week, with investors pouring a net $89 million and $14 million into equity and bond funds, respectively.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Vinay Dwivedi)