Global equity funds see surge in inflows on Fed pause hopes

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FE Team | Published: November 17, 2023 22:36:51

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Global equity funds saw significant inflows in the week ending November 15, buoyed by investor hopes that cooler-than-expected US inflation would prompt the Federal Reserve to pause interest rate hikes, reports Reuters.
The MSCI World Equity Index hit a two-month peak of 686.32 this week, propelled by US data on Tuesday indicating that consumer prices in October remained steady, defying expectations of a 0.1 per cent increase. The core Consumer Price Index (CPI), rising only 0.2 per cent, also fell short of the anticipated 0.3 per cent hike.
Investors pumped in a net $11.48 billion into global equity funds during the week, marking the biggest weekly net purchase since June 14, LSEG data showed.
US equity funds alone attracted $9.33 billion, a significant rise from the $1.84 billion in net purchases a week earlier. European and Asian equity funds also saw inflows, attracting $1.24 billion and $431 million, respectively.
The technology sector, in particular, witnessed a notable surge in interest, with a net $2.15 billion poured into the sector-- the highest since Dec. 15, 2021.
Gold, precious metals and communication services sectors attracted $534 million and $237 million, respectively.
Global bond funds continued to attract capital, with approximately $3.5 billion channeled into them, marking the second consecutive week of net buying. High-yield bond funds recorded net purchases of around $5.01 billion, building on the previous week's $6.43 billion inflow.
However, government bond funds saw a drastic reduction in inflows, receiving only $140 million, a 95 per cent decrease from the $2.77 billion net buying in the week prior.