Global equity funds regained investor favor after six straight weeks of withdrawals, with net inflows for the first time in seven weeks in the week ended Aug. 10, as inflation cooled and expectations for aggressive interest rate hikes by the Federal Reserve subsided.
Global equity funds pulled in $2.75 billion in the week for the first time since June 22, according to Refinitiv Lipper data. US and Asian stock funds took in US$4.21 billion and US$690 million respectively, while European stock funds outflowed US$386 million.
By industry, consumer staples and healthcare stock funds took in $535 million and $389 million, respectively, while financial and technology stock funds continued to bleed, losing $412 million and $386 million, respectively.
Meanwhile, investors bought about $5 billion in global bond funds, the second straight week of inflows. Government bond funds posted a net inflow of $2.25 billion for the second week in a row, but investors sold $1.66 billion in short- and mid-term bond funds, and $47 million in high-yield bond funds.
Money market funds saw outflows of $12.51 billion, the largest in six weeks; commodities showed energy funds took in $101 million, the first net inflow in seven weeks, but precious metals lost $394 million.
Emerging market funds showed bond funds attracted $766 million worth of buying, while equity funds saw a fourth straight week of outflows of $488 million.
The core consumer price index (CPI) released by the United States in July was unchanged from June, and the market expects the Fed to raise interest rates by 2 yards (50 basis points) instead of 3 yards (75 basis points) at the September meeting. The July non-farm payrolls report released this week also revealed that the labor market was quite strong, and the ensuing good news boosted investor sentiment.