Global equity funds draw inflows amid economic optimism

Global equity funds attracted substantial inflows in the week to Jan. 31, driven by upbeat US economic growth data, and inflation readings showing a continued moderation in price pressures.

According to data from LSEG, global equity funds secured a net $7.43 billion in inflows during the week, contrasting with outflows seen during the previous five weeks.

A Commerce Department report last week showed the US economy grew much faster than expected at 3.3 per cent in the last quarter, allaying concerns of an impending recession.

Meanwhile, data last week showed the US personal consumption expenditure index - the Federal Reserve's preferred inflation gauge - rose moderately in December, bolstering expectations that interest cuts are coming in the months ahead.

By region, Asian equity funds attracted $3.7 billion, the biggest inflow in three weeks. U.S. and European funds pulled in a net $1.83 billion and $1.14 billion, respectively.

Investors put $1.98 billion into tech sector funds, continuing a buying trend into a third successive week. Industrials also attracted $579 million, while the utilities sector saw $1.04 billion in outflows.

Debt funds were in demand for the sixth week in a row, with investors pouring about $12.5 billion into global bond funds on a net basis.

Global high yield funds received $4.25 billion, marking their seventh successive week of net purchases. Government, and loan participation funds also saw $1.5 billion and $452 million worth of net buying.

Concurrently, money market funds obtained $32.89 billion, their first weekly inflow in three weeks.

In the commodities segment, precious metal funds received about $50 million, a significant drop from $511 million worth of net purchases in the previous week. Energy funds, meanwhile, saw $77 million worth of net buying.

Data covering 29,702 emerging market funds showed equity funds saw $361 million worth of net purchases, the first weekly inflow in three weeks, while bond funds suffered about $711 million worth of net selling.