Global equity funds extend inflow streak as earnings optimism and reduced rate-hike bets lift sentiment

Global equity funds continued their 12-week streak of attracting inflows, reaching $18.62 billion in net purchases during the week ending August 12. The surge in investments was driven by optimism surrounding a robust earnings season and tempered concerns over U.S. payroll growth and inflation, which signaled a possible postponement of a Federal Reserve rate hike.

The MSCI All-Country World Equity Index achieved a record high of 1,163.05 on Wednesday, climbing 2.85% in the previous week to its best weekly performance since April 17, propelled by earnings from AI-related firms like Caterpillar and Palantir.

Europe experienced the largest weekly net inflow in equity funds, with $13.52 billion, surpassing the previous July 8 record. U.S. and Asian equity funds also saw inflows of $2.58 billion and $4.13 billion, respectively. Conversely, investors withdrew $1.7 billion from technology-sector funds, ending a six-week period of net purchases. However, they bolstered gold and precious metals equity funds by buying $1.6 billion and increased investments in consumer staples sector funds by $609 million.

Weekly net investment in bond funds surged to a four-week high of $18.01 billion, with significant buying interest in short-term bond funds, euro-denominated bond funds, government bond funds, and loan participation funds. Money market funds also attracted net investments of $28.41 billion, extending their inflow streak to two consecutive weeks.

Gold and other precious metals funds continued to be net buyers for a fifth straight week, amassing a net $2.62 billion. Energy funds, however, recorded their first weekly inflow in three weeks, amounting to $434 million. Equity funds in emerging markets attracted net inflows of $3.45 billion for a fifth consecutive week, while bond funds received net investments of $871 million.