Global equity funds attract big inflows at start of new year -Lipper

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People wearing surgical masks walk past a screen showing Nikkei index outside a brokerage in Tokyo

(Reuters) – Global equity funds attracted massive inflows for a third straight week in the seven days to Jan. 5, as world stocks started the new year on a solid footing, shrugging off worries over the Omicron coronavirus variant and higher inflation. Investors purchased global equity funds worth a net $19.01 billion in the period, data from Refinitiv Lipper showed, although that was down from $29.45 billion in the previous week.

For a related graphic on Fund flows: Global equities bonds and money market, click https://fingfx.thomsonreuters.com/gfx/mkt/dwvkrkeoapm/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg

MSCI’s global equity index hit a record high this week, with strong gains across the board from the United States to Asia.

However, minutes of the Federal Reserve’s most recent meeting, released on Wednesday, poured cold water on the rally as they pointed to a faster-than-expected rise in U.S. interest rates.

Tech stocks were also hit during the week due to a spike in U.S. Treasury yields. U.S. equity funds attracted a net $8.98 billion in the week to Jan. 5, while European and Asian equity funds drew $7.25 billion and $0.43 billion respectively. Financial funds drew $1.21 billion and healthcare received $564 million but tech funds saw a net outflow of $303 million in a third straight week of selling.

For a related graphic, click https://fingfx.thomsonreuters.com/gfx/mkt/zjpqknwxwpx/Fund%20flows-%20Global%20equity%20sector%20%20funds.jpg

Investors purchased global bond funds worth a net $14.95 billion, their biggest weekly net buying in four months.

Short- and medium-term bond funds pulled in $4.56 billion, their biggest weekly inflow in six months. High-yield bond funds received $3.05 billion while inflation-protected bond funds attracted $2.03 billion.

Net inflows into government-bond funds dropped to a three-week low of $1.04 billion.

For a related graphic, click https://fingfx.thomsonreuters.com/gfx/mkt/gkplgbdrjvb/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Jan%205.jpg

Global money market funds received inflows of $19.53 billion, a 51% decline from the previous week.

Among commodities, precious metal funds drew net inflows of $349 million while energy funds saw a marginal outflow of $2 million.

An analysis of 23,858 emerging market funds showed bond funds attracted a net $1.95 billion, their largest weekly inflow in nine months, while equity funds received $1.9 billion, a 30% increase over the previous week.

For a related graphic, click https://fingfx.thomsonreuters.com/gfx/mkt/mypmnbkdbvr/Fund%20flows-%20EM%20equities%20and%20bonds.jpg

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan)

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