Global equity funds lure big inflows as Omicron fears ease
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(Reuters) – Global equity funds saw massive inflows during the week ending Dec. 29, as investors cheered signs that Omicron COVID-19’s economic effects would not have the devastating impact they had feared.
They bought $30.08 billion net of purchases the previous week. That was their biggest weekly inflow in nine years.
Graphic: Fund flows: Global equities bonds and money market-https://fingfx.thomsonreuters.com/gfx/mkt/jnvwejejgvw/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg
Global equity index MSCI gained 4.3% over seven trading days, Dec. 29 to 29, thanks to investors who cheered Omicron’s less likelihood of hospitalizations and the fact that certain vaccines against Omicron are more effective.
Signs that governments want to reduce economic harm by relaxing isolation rules and delaying COVID curbs are encouraging sentiments.
U.S. equity funds bought $19.43B in net purchases, while European funds and Asian funds purchased $5.62 Billion and $1.44 Billion respectively.
The net buys by equity funds were $1.3B, which is the highest in 10 weeks. Health care attracted $332M. But, consumer staples, utilities, and tech funds experienced outflows in excess of $380M, $338 Million, and $285 Million, respectively.
Graphic: Fund flows: Global equity sector funds-https://fingfx.thomsonreuters.com/gfx/mkt/akvezezeqpr/Fund%20flows-%20Global%20equity%20sector%20%20funds.jpg
The largest single-week net buy by investors was $10.79 Billion in global bond funds.
Net buying by global high-yield fund investors reached $2.64 trillion, which is the largest inflow of net purchasing in seven weeks. Corporate bond funds received $1.74 billion, and inflation-linked funds, $875 million.
Purchasing in government bonds funds fell 51% to $1.88 Billion, compared with the week before.
Graphic: Global bond fund flows in the week ended Dec 29-https://fingfx.thomsonreuters.com/gfx/mkt/klpykqkqmpg/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Dec%2029.jpg
Global money market funds made their first net weekly purchase of $37.82 million in the last three weeks.
Energy funds had outflows totaling $81 million. It was their third consecutive week with net sales. Meanwhile, precious metals funds were subject to marginal outflows equal to $2 million. Analysis of 2466 emerging market funds indicated that equity funds saw $2.18Bn in weekly inflows, their largest inflow in more than 2 months. However, bond funds received $386M, the first ever inflow within three weeks.
Graphic: Fund flows: EM equities and bonds-https://fingfx.thomsonreuters.com/gfx/mkt/lgvdwjwjopo/Fund%20flows-%20EM%20equities%20and%20bonds.jpg
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