Sept 13 (Askume) – Global investors were net sellers of equity funds for the second consecutive week through Sept 11, as concerns about the health of the U.S. economy and caution about the political climate ahead of the U.S. presidential debates .
However, withdrawals declined due to optimism over the central bank’s interest rate cut.
LSEG data showed investors pulled out $3.46 billion from global equity funds this week, with the sales shrinking from the previous week’s net sales of $4.96 billion.
Global stocks sold off last week as US data indicated an economic slowdown , but stocks rose more than 2% this week on the back of a European Central Bank interest rate cut and the prospect of a 50 basis point cut in US interest rates at next week’s meeting.
Investors sold $7.82 billion in U.S. stock funds last week, compared with net sales of $11.54 billion the previous week. In comparison, Asian and European funds attracted $2.91 billion and $793 million, respectively.
“With interest rates starting to be cut around the world and unemployment remaining low, we again favour global equities over fixed income,” Ajay Rajadhyaksha, global head of research at Barclays, said in a note.
“But investors may be more willing to wait and see for now while waiting for the results of the US presidential election to become clearer.”
The technology industry saw massive outflows of $1.97 billion in the week ended September 11, the highest level since November 2023. At the same time, investors withdrew $1.53 billion from the financial sector and allocated $1.12 billion and $878 million to the consumer goods and utilities sectors, respectively.
This week, investors added $21.67 billion and $4.14 billion to safe money market and government bond funds, respectively.
Global bond funds attracted capital inflows of $11.81 billion for 38 consecutive weeks, with investors pouring $3.12 billion into short-term funds and $1.5 billion into high-yield funds.
Gold and other precious metals funds remained attractive for the fifth consecutive week with net buying of $472 million, while energy funds added $150 million.
Data covering 29,592 emerging market funds showed that stock funds lost $1.05 billion for the 14th consecutive week. In comparison, bond funds recorded a gain of $567 million, marking the 12th consecutive week of inflows.
