Global equity funds see strongest inflows in five weeks

Global equity funds posted their largest weekly inflows in five weeks in the seven days to February 18, as easing concerns over artificial intelligence stocks and renewed optimism about U.S. rate cuts improved investor sentiment.

According to LSEG Lipper data, investors injected $36.33 billion into global equity funds during the week — the strongest inflow since January 14, News.Az reports, citing Reuters.

U.S. consumer price data released last Friday showed inflation rose 2.4% year-on-year in January, close to expectations of 2.5%. The figures reinforced market expectations that the Federal Reserve could deliver two rate cuts this year, supporting demand for growth assets.

European funds led regional inflows, attracting $17.22 billion, broadly matching the previous week’s $17.68 billion, as the STOXX 600 index climbed to a record high. U.S. funds recorded net inflows of $11.77 billion, reversing a $1.48 billion outflow a week earlier, while Asian funds drew $3.8 billion.

Sector-wise, industrials, metals and mining, and technology funds were in demand, with net weekly inflows of $1.82 billion, $818 million and $696 million, respectively.

Global bond funds extended their winning streak to a seventh consecutive week, attracting $19.79 billion. Short-term bond funds led with $5 billion — the highest weekly intake since December 24. Euro-denominated bond funds and corporate bond funds also saw solid inflows of $2.54 billion and $2.35 billion, respectively.

Money market funds gained $7.05 billion, marking a fourth straight week of inflows. In contrast, gold and precious metals funds recorded net outflows of $1.86 billion, ending a five-week run of gains.

In emerging markets, equity funds drew $8.1 billion, lifting year-to-date inflows to $56.52 billion. Bond funds in these markets also attracted $1.94 billion for a second consecutive week.

Elias Hilmer, market economist at Capital Economics, said that while the recent underperformance of U.S. tech stocks compared with emerging markets recalls the period before the dotcom bust, the AI-driven rally may still have room to run.

However, he cautioned that if the AI bubble were to burst, emerging market equities could prove more resilient than their U.S. counterparts.

News.Az 

By Nijat Babayev