GRAPHIC-Global equity funds see biggest weekly inflows in over a decade

BY Reuters | ECONOMIC | 11/15/24 05:30 AM EST

Nov 15 (Reuters) - Global equity funds saw the largest weekly net purchases in over a decade in the week to Nov. 13, driven by investor optimism that a decisive second-term mandate for Donald Trump would bolster corporate earnings and fuel U.S. economic growth.

Investors ploughed $49.3 billion into global equity funds during the week, the highest amount on a net basis since at least January 2014, according to LSEG Lipper data.

The MSCI World index scaled record highs for three consecutive days following Trump's victory last week, though it has pulled back about 1.6% from record levels so far this week on prospects of a potentially slower pace of U.S. Federal Reserve rate cuts.

"We continue to hold a positive view on global and U.S. equities and believe that the macro backdrop is favourable for this year's equity rally to gain further ground," said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Investors flocked to U.S. equity funds, adding $37.37 billion in their biggest weekly net purchase in at least a decade. They also snapped up $11.28 billion worth of European equity funds, while withdrawing a meagre $305 million from Asian funds.

The financial sector attracted a significant $4.68 billion, the highest in at least a decade. Investors also acquired funds worth $1.35 billion and $414 million, respectively, in the industrials and consumer discretionary sectors.

Global bond funds were popular for the 47th week running, with about $5.37 billion in net inflows during the week.

Global high yield and loan participation funds saw a noteworthy $2.65 billion and $1.49 billion worth of inflows, with the government bond funds segment witnessing $479 million worth of net sales.

Investors pumped about $73.61 billion into global money market funds following net purchases of $127.11 billion in the week before.

Gold and precious metals funds, meanwhile, witnessed a net $950 million worth of second consecutive weekly outflows.

Data for 29,683 emerging market funds showed investors pulled $5.8 billion out of equity funds during the week, the biggest amount in 11 months. They also divested $939 million worth of bond funds.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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