Global equity funds record inflows for the 11th consecutive week - Sarmad
Global equity funds recorded net inflows for the eleventh consecutive week, as optimism surrounding a strong earnings season and falling crude oil prices boosted investor appetite for riskier assets.
Investors pumped net liquidity of approximately $21.15 billion into global equity funds during the week ended August 5, compared to net purchases of around $27.72 billion in the previous week, according to data from LSEG Lipper.
Amazon announced last week its strongest cloud business growth in over four years. Caterpillar, widely viewed as a key indicator of global industrial economic performance, and Palantir Technologies also reported strong results earlier this week.
Earnings data for approximately 808 companies listed on the MSCI World Index, which have reported results so far, showed that their total earnings in the last quarter rose by 40.9 percent compared to the same period last year, while results from about 75 percent of them exceeded analysts’ expectations.
By region, European equity funds attracted $12.52 billion, marking their largest weekly inflow since July 8, while Asian funds recorded inflows of $8.15 billion. Conversely, US funds bucked the trend, recording outflows of approximately $1.58 billion.
By sector, inflows to technology funds slowed to their lowest level in six weeks at $1.44 billion. Funds in the industrial, consumer discretionary, and healthcare sectors recorded net purchases of $1.08 billion, $710 million, and $653 million, respectively.
Meanwhile, investors injected a net $12.27 billion into global bond funds, marking their largest weekly net purchases in three weeks.
High-yield bond funds attracted $3.66 billion, their largest weekly inflow in five weeks. Short-term bond funds and loan participation funds also recorded inflows of $3.43 billion and $915 million, respectively.
Money market funds attracted net inflows of $57.48 billion, ending a three-week streak of net outflows.
In the commodities sector, gold and other precious metals funds continued to attract investors for the fourth consecutive week, drawing net inflows of $345 million. Conversely, energy funds recorded their second consecutive weekly net outflow, amounting to $153 million.
In emerging markets, equity funds gained momentum, with weekly inflows rising to their highest level in over five months at $9.26 billion. Bond funds in these markets also attracted net investments of $303 million, according to data covering 28,959 funds.
US equity funds recorded outflows during the week ended August 5, with investors withdrawing a net $1.58 billion from US equity funds, a partial reversal from the net outflows of $11.77 billion in the previous week, according to LSEG Lipper data. The S&P 500 index rose by approximately 6.5 percent from its low of 7,313.92 points recorded last week, reaching a record high of 7,793.68 points on Wednesday.
U.S. growth equity funds recorded net outflows of $5.5 billion during the week, more than offsetting the $3.1 billion increase in inflows during the previous week. In contrast, investors recorded net purchases of $1.99 billion in value equity funds.
Meanwhile, weekly investments in sector funds fell to a three-week low of $1.62 billion, with net purchases in technology funds dropping to a six-week low of $388 million.
In contrast, industrial, healthcare, and consumer discretionary sector funds attracted notable net inflows of $875 million, $866 million, and $708 million, respectively.
U.S. bond funds recorded weekly net inflows of $6.52 billion, reflecting a rise in demand compared to the $1.26 billion in net inflows recorded the previous week.
Short- to intermediate-term investment-grade bond funds, short- to intermediate-term government and Treasury bond and note funds, and municipal bond funds led bond fund flows, attracting net purchases of $2.05 billion, $1.3 billion, and $1.15 billion, respectively.
Investor interest in money market funds also revived, attracting $55.69 billion in inflows after three consecutive weeks of outflows.
