(Reuters) – Global equity funds saw money inflows in the week to May 25 as some investors took heart from a rebound in markets this week, after sharp declines in stock markets in the previous seven weeks.
According to Refinitiv Lipper, investors bought a net $6.16 billion worth of global equity funds, marking their first weekly net buying since April 6.
Graphic: Fund flows: Global equities, bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/egpbkwqqzvq/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg
The MSCI all country world index has gained over 3% this week, after slumping about 12.7% in the last seven weeks on worries that aggressive rate increases to tame inflation could send the global economy into a tailspin.
The big inflows into global equity funds were also due to the creation of new shares in the equity exchange-traded funds (ETF), Jefferies said in a note.
The data showed equity ETFs saw inflows worth $15.76 billion in the week, the highest in nine weeks.
U.S. and Asian equity funds had inflows of $4.61 billion and $1.22 billion, respectively, but European funds attracted just $0.13 billion.
Chinese equity funds obtained $0.58 billion, marking their first weekly net buying in seven weeks.
Data for sector funds showed industrials drew inflows of $713 million but financials and tech continued to face outflows, amounting $1.74 billion and $1.44 billion, respectively.
Graphic: Fund flows: Global equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/klpykobjepg/Fund%20flows-%20Global%20equity%20sector%20funds.jpg
Meanwhile, investors sold a net $9.94 billion of bond funds in the week, their eight consecutive weekly outflow.
Global investors exited short- and medium-term bond funds worth $5.14 billion, while high yield funds witnessed outflows of $2.18 billion.
However, inflation linked funds obtained $0.59 billion and government bond funds gained $3.85 billion, posting inflows for a fifth straight week.
Graphic: Global bond fund flows in the week ended May 25 – https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkgodjpx/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20May%2025.jpg
On the other hand, investors purchased $23.13 billion of money market funds after three weeks of net selling in a row.
Data for commodity funds showed gold and precious metal funds received $1.36 billion after four weeks of net selling but energy funds saw outflows of $29 million.
An analysis of 24,276 emerging market funds showed investors sold $1.5 billion of bond funds and $332 million of equity funds, marking the seventh weekly outflow in a row.
Graphic: Fund flows: EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/dwvkrnlqrpm/Fund%20flows-%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill)