Global equity fund inflows surge on trade optimism, inflation relief

Global equity funds attracted the largest weekly inflow in seven weeks in the week through May 14, buoyed by a US-China trade war truce that has significantly reduced the risk of a global recession, reports Reuters.

According to LSEG Lipper data, global equity funds bagged a net $19.57 billion in inflows during the week, the largest amount for a week since March 26.

US President Donald Trump's ongoing trade negotiations, including a 90-day tariff truce with China, signaled a pause in what analysts had warned could escalate into a devastating trade war capable of plunging the global economy into recession.

Softer-than-expected US consumer inflation in April also offered relief to investors concerned about the inflationary impact of US tariff policies, which had sharply lowered expectations for Federal Reserve rate cuts.

Investors bought a net $12.86 billion worth of US equity funds, ending a four-week selling trend. The European and Asian equity funds also saw a net $3.29 billion and $2.89 billion worth of purchases, respectively.

Global equity sectoral funds witnessed a net $3.77 billion worth of inflows, which halted a five-week-long selling streak. Investors purchased tech, industrial and financial sector funds, each of over $1 billion in value.