(Reuters) – Investment flows in global equity funds rose to their highest level in three weeks in the week ending June 16 as investors ignored inflation concerns and focused on improving the global economic outlook.
Global equity funds received a net $ 10.3 billion in the week ending June 16, compared with around $ 13 billion in exits the prior week, data from Refinitiv Lipper showed.
European equity funds led inflows, attracting $ 8.6 billion, while US equity funds and Asian equity funds made net purchases worth $ 0.4 billion and $ 1.2 billion, respectively.
(Chart: Fund flows into global money markets and equity bonds: https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzxoqovw/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets. jpg)
Global stocks hit new peaks earlier this week on investor bets that higher inflation levels are transitory and on optimism about broadening the economic recovery from the pandemic.
However, the MSCI World Equity Index has fallen since Wednesday, as US Federal Reserve officials forecast higher interest rates earlier than expected.
Data from Lipper showed that global bond funds had a net purchase of $ 9 billion in the week ending June 16, although inflows were the smallest in three weeks.
Global high-yield bonds posted net sales of $ 1.43 billion, the highest in four weeks. However, inflation-linked bonds continued to attract cash flows for the seventh consecutive week.
(Chart: Global Cash Flows to Equities: https://fingfx.thomsonreuters.com/gfx/mkt/gjnvwmnymvw/Global%20fund%20flows%20into%20equity%20sectors.jpg)
Meanwhile, global money market funds faced outflows worth $ 56.6 billion, the highest since December 2020.
Among commodities funds, precious metals funds had meager inflows, while energy funds continued to post outflows for the third consecutive week.
Gold was expected to post its worst week in nearly nine months, losing about 4.5% so far, buffeted by a surge in US Treasury yields since the Fed’s aggressive lean on Wednesday.
(Chart: Global Bond Cash Flows for the Week Ended June 16 – https://fingfx.thomsonreuters.com/gfx/mkt/oakvebkagpr/GLobal%20bond%20funds%20flows%20in%20the%20week%20ended % 20June% 2016. Jpg)
An analysis of 23,712 emerging market funds showed that bond funds had inflows of $ 1.27 billion after marginal outflows the previous week, while equity funds attracted $ 184 million, the third consecutive week of inflows.
(Chart: Cash Flows to Emerging Market Equities and Bonds: https://fingfx.thomsonreuters.com/gfx/mkt/azgpoogbqpd/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg)
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