Global equity fund inflows hit 11-month high on Fed rate cut bets

(Reuters) -Global equity funds witnessed robust demand in the week through October 1 as an inline U.S. inflation report and weaker-than-expected private payrolls data renewed hopes of Federal Reserve rate cuts.

Investors bought a net $49.19 billion worth of global equity funds during the week, the most since November 13 last year, data from LSEG Lipper showed.

Investors snapped up U.S. equity funds of $36.41 billion in their largest weekly net purchase in nearly 11 months. European and Asian funds also saw weekly inflows to the tune of $7.36 billion and $3.94 billion, respectively.

Equity sectoral funds received $11.56 billion, the largest amount for a week since at least January 2022, with tech and financials leading the net purchases at $4.15 billion and $3.43 billion, respectively.

Ned Davies Research upgraded global equities to overweight on Thursday, raising stock allocation to 60% from 55% and cutting cash to 5% from 10%, citing seasonal strength, earnings momentum, and easing inflation pressures.

Global bond funds were popular for a 24th straight week, although weekly net investments eased to a 14-week low of $6.06 billion.

Euro-denominated bond funds and high yield bond funds stood out with a net of $7.37 billion and $2.41 billion weekly inflows. In contrast, short-term bond funds saw a net $8.52 billion outflow after 13 weeks of inflows in a row.

Investors parked a net of $8.84 billion into money market funds, posting the first weekly net purchase in three weeks.

Gold and precious metals commodity funds saw a sixth successive weekly inflow, amounting to $4.66 billion on a net basis.

In emerging markets, investment activities were mixed as equity funds faced with $239 million net outflows after 10 weeks of inflows in a row, while bond funds had a net $373 million weekly inflow, data for a combined 29,715 funds showed.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Leroy Leo)

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