Global equity funds draw weekly inflows on trade deal optimism

Inflows into global equity funds picked up again in the week through July 23 as optimism over US trade deals, stronger than expected US economic reports and an encouraging start to the corporate earnings season boosted risk sentiment.

Global investors snapped up a net USD 8.71 billion worth of equity funds during the week, reversing a USD 4.4 billion net withdrawal in the prior week, data from LSEG Lipper showed.

The United States and Japan agreed a deal earlier this week which cut existing import tariffs on Japanese goods to a lower-than-threatened 15%. Investors were also hopeful about the prospects of the US and the European Union settling on US import tariffs of around 15%.

Investors took comfort from encouraging initial earnings reports as advanced AI chip maker TSMC posted a record profit and Gatorade owner PepsiCo upgraded its earnings forecasts.

Net European equity fund inflows reached an 11-week high of USD 8.79 billion, while Asian funds drew a net USD 1.17 billion. US equity funds lagged, although net outflows eased to USD 2.68 billion from about USD 11.67 billion the prior week.

The technology sector gained USD 1.61 billion, reversing the previous week’s USD 576 million net outflow. The financial and industrial sectors also saw USD 1.13 billion and USD 1.61 billion net additions, respectively.

Net purchases of global bond funds extended into a 14th week as they added USD 17.94 billion.

Investors pumped USD 4.14 billion into short-term bond funds, the largest amount in 13 weeks. Euro-denominated bond funds and high-yield funds attracted a net USD 3.89 billion and USD 2.51 billion, respectively.

Gold and precious metals commodity funds recorded a net USD 1.9 billion worth of purchases, the largest weekly figure since June 18.

Global money market funds drew a net USD 2.09 billion after about USD 21.78 billion of net sales a week ago.

Emerging markets saw a revival in buying interest with investors adding bond funds of USD 2.19 billion and equity funds of USD 250 million after net disposals of USD 1.14 billion and USD 155 million in the prior week, data for a combined 29,669 funds showed.

(Reporting by Gaurav Dogra in Bengaluru; Editing by Kirsten Donovan)