GRAPHIC-Global equity funds see big inflows on China data and Fed rate cut hopes

Credit: REUTERS/CAITLIN OCHS

March 22 (Reuters) - Global equity funds attracted substantial inflows in the week to March 20, driven by strong industrial and retail data from China and optimism about anticipated rate cuts by the U.S. Federal Reserve later in the year.

According to data from LSEG, investors purchased a net $15.7 billion worth of global equity funds during the week after about $21.95 billion worth of net accumulation in the previous week.

The MSCI World Stock Index .MIWD00000PUS hit a new record of 785.62 following the Fed's Wednesday announcement, which reinforced its stance on reducing rates three times this year.

Regionally, U.S. funds led with $14.07 billion in inflows, the highest since mid-June 2023, while Asian funds added $3.29 billion, but European funds saw outflows of $1.91 billion.

The tech sector funds gained $2.12 billion in inflows during the week, the biggest amount since Feb. 14, whereas the financial sector faced sales of $1.02 billion. The metals & mining sector attracted $459 million.

Bond funds extended their inflow streak to 13 weeks, attracting $4.88 billion, with corporate bonds drawing $3.17 billion and government bonds $1.3 billion. However, global short-term bonds experienced $2.12 billion in net withdrawals.

Money market funds, meanwhile, witnessed outflows of about $65.9 billion, their first weekly net selling in four weeks.

Among commodities, precious metal funds broke a seven-week-long selling trend with a massive $1.46 billion worth of net buying, the biggest since May 2022. Conversely, energy funds suffered $102 million worth of outflows.

Data covering 29,715 emerging market funds showed equity funds lost $450 million in outflows, marking their third weekly net selling in a row. Bond funds also witnessed $933 million worth of net disposals in contrast to about $454 million worth of net purchases, a week ago.

Fund flows: Global equities, bonds and money markets https://tmsnrt.rs/3Jt3wjr

Fund flows: Global equity sectors https://tmsnrt.rs/3J5InKT

Weekly flows into global bond funds https://tmsnrt.rs/44OuJ93

Fund flows: EM equities and bonds https://tmsnrt.rs/3ysJzD6

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shailesh Kuber)

((gaurav.dogra@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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