FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, U.S., May 1, 2020. REUTERS/Kevin Lamarque
March 19, 2021
(Reuters) – Global equity funds attracted inflows for the 11th week running in the week to March 17, helped by hopes of unceasing low interest rates, after the U.S. Federal Reserve signalled its intent to keep rates near zero until at least 2024.
Investors poured about $36.46 billion into equity funds in the week, the biggest inflow in five weeks, Refinitiv Lipper data showed.
Graphic: Fund flows into global equities, bonds and money markets – https://fingfx.thomsonreuters.com/gfx/mkt/dgkvlebqapb/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg
MSCI’s benchmark for global equity markets climbed 1% this week but reversed track on Friday, pressured by a surge in U.S. bond yields.
Among equity funds, technology funds received inflows of $2.19 billion in the week to March 17 after an outflow of $524 million the previous week, with investors scooping up heavily battered tech stocks at cheaper valuations.
Global recovery hopes also lured inflows for cyclicals such as industrials, banks and miners.
On the other hand, lower oil prices affected the energy sector, which showed an inflow of $184.9 million, down more than 60% from the previous week.
Graphic: Global fund flows into equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/nmovarwbbpa/Global%20fund%20flows%20into%20equity%20sectors.jpg
However, alternative energy funds that primarily invest in solar, wind and water companies registered inflows of $1.4 billion, the highest in seven weeks.
Global bond funds, meanwhile, achieved inflows of $8.7 billion, mainly owing to net purchases in shorter-term bonds and inflation-linked bonds.
Global corporate bonds suffered an outflow of $960 million in the week, the fourth in as many weeks.
Graphic: Global bond inflows in the week ended March 17 – https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzgkjgpw/Global%20bond%20inflows%20in%20the%20week%20ended%20March%2017.jpg
In commodities, precious metal funds registered net sales of $765 billion for a sixth consecutive weekly outflow.
An analysis of 23,757 emerging market funds showed equity funds attracted $4.73 billion in inflows, the biggest in seven weeks, while bond funds achieved inflows of $312 million.
Graphic: Fund flows into EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/jznpnglqovl/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by David Goodman)