Global investors extend buying streak into equity funds on signs of easing inflation
Business
$53.1bn also pumped into money market funds
BENGALURU (Reuters) – Global investors extended their streak as net buyers of equity funds into a second week, drawing support from indications of cooling inflation that may moderate central banks' inclination to raise rates further.
According to Refinitiv Lipper data, global equity funds received a net $5.94 billion in inflows in the week ended July 5, after witnessing net buying of $3.36bn in the previous week.
Last week's personal consumption expenditures (PCE) report from the US Commerce Department showed cooler-than-expected inflation in May, while consumer spending abruptly decelerated, providing further evidence that the Fed's barrage of rate hikes are having their desired effect.
Investors allocated $4.44bn to US equity funds and $2.29bn to Asian equity funds, while withdrawing $1.29bn from European funds.
Among sector funds, inflows of $871 million were observed in industrials, $278m in consumer staples, and $275m in technology. However, financials experienced an outflow of $548m.
Meanwhile, global bond funds received a net $10.4bn in a second straight week of net buying.
Global government bond funds attracted inflows of $1.82bn, while corporate bond funds recorded the largest weekly inflow in six weeks with $2.19bn. Additionally, high-yield funds saw net purchases of $536m, rebounding after two consecutive weeks of outflows.
Investors also pumped $53.1bn into money market funds, marking their first weekly net buying in four weeks.
Data for commodity funds showed that investors withdrew $767m from precious metal funds in a sixth straight week of net selling, but energy funds received about $35m after two weekly outflows in a row.
Meanwhile, data for 24,130 emerging market funds showed equity funds had $504m worth of outflow during the week, the first in four weeks, but bond funds received about $1.4bn in inflows.
