Global equity funds draw fourth weekly inflow on hopes of Fed rate cut

Global equity funds attracted inflows for a fourth straight week through October 15, as dovish comments from U.S. Federal Reserve Chair Jerome Powell reinforced expectations that the central bank will cut interest rates at its meeting later this month.

Investor appetite, however, remained cautious amid renewed U.S.-China trade tensions after President Donald Trump indicated he may scale back certain trade ties with Beijing.

Investors bought a net USD 2.17 billion worth of global equity funds during the week in line with nearly USD 2 billion weekly net purchase the prior week, LSEG Lipper data showed.

The U.S. and Asian equity funds saw nearly USD 1 billion inflows each, while European funds had a net USD 1.62 billion weekly outflow, which ended a 10-week-long trend of net purchases.

Equity sectoral funds, meanwhile, saw an uptick in demand as they received USD 6.61 billion, nearly a 50% rise from the previous week’s USD 4.39 billion net purchases.

Tech and healthcare sectors led the sectoral net investments as they received about USD 1.91 billion and USD 1.38 billion, respectively in weekly inflows.

Inflows into global bond funds, meanwhile, eased to a 16-week low as investors poured just USD 7.97 billion into these funds.

Demand for government bond funds, however, jumped to the highest in five months with a net USD 3.22 billion in weekly inflows. Investors also bought short-term bond funds of USD 2 billion but shed a net USD 1.08 billion worth of loan participation funds.

Investors, meanwhile, divested USD 6.72 billion worth of money market funds, partly liquidating the prior week’s USD 64.46 billion net investments.

Gold and precious metals commodity funds drew USD 2.83 billion, the 20th weekly inflow in 21 weeks.

In emerging markets, investors ended their eight-week-long buying streak with a net USD 1.04 billion weekly divestment. Bond funds, meanwhile, saw a net USD 2.38 billion weekly inflow, data for a combined 29,687 funds showed.

(Reporting by Gaurav Dogra; Editing by Arun Koyyur)