Global equity funds see big inflows as risk appetite rebounds

FILE PHOTO: FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City
FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly/File Photo/File Photo

December 24, 2021

(Reuters) – Global equity funds saw massive inflows as risk sentiment returned with investors believing that the Omicron variant won’t bring a big setback to the world economy next year.

According to Refinitiv data, investors purchased $33 billion worth of global equity funds in the week ending Dec. 22, compared with an outflow of $13.1 billion in the previous week.

Graphic: Weekly fund flows into global assets https://graphics.reuters.com/GLOBAL-MARKETS/gdvzymzkjpw/chart.png

U.S. equity funds lured an inflow of $27.5 billion, while Asian equity funds obtained $1.8 billion. On the other hand, European equity funds saw an outflow worth $1.5 billion.

Global stocks have made a strong recovery this week, after their downtrend earlier this month, buoyed by strong corporate earnings and reports that Moderna Inc’s COVID-19 vaccine provides protection against the Omicron variant.

Graphic: Fund flows into equity sectors https://graphics.reuters.com/GLOBAL-BONDS/xmpjonzjlvr/chart.png

Meanwhile, global bond funds received $5.4 billion, after seeing outflows in the previous week.

Graphic: Bond flows in the week ended Dec. 22 https://graphics.reuters.com/GLOBAL-MARKETS/egpbkozjzvq/chart.png

Money market funds, on the other hand, saw an outflow worth $3.2 billion during the week, underscoring the positive risk sentiment.

Among commodity funds, precious metal funds witnessed net sales of $578 million, their third consecutive weekly outflow.

An analysis of 24,070 emerging market funds showed bond funds witnessed outflows of $89 million, while investors sold equity funds worth $1.8 billion.

Graphic: Flows into EM equity and bond funds https://graphics.reuters.com/GLOBAL-BONDS/gdpzymznjvw/chart.png

(Reporting By Patturaja Murugaboopathy in Bengaluru; Editing by Toby Chopra)