Global equity funds regain inflows on US inflation relief

(Reuters) - Global equity funds witnessed sharp inflows in the week through Dec. 25, rebounding from significant net sales the previous week, buoyed by a benign U.S. inflation report and relief that Washington had averted a government shutdown, which restored investor confidence in risk assets.

According to LSEG data, investors pumped a hefty $34.38 billion into global equity funds, the largest amount in six weeks, following a net $36.84 billion worth of sales in the week before.

A report from the Commerce Department last Friday showed the PCE price index rose 0.1% in November, cooler than analysts expected, restoring some hope for further Federal Reserve rate cuts next year.

U.S. equity funds attracted $20.56 billion, marking their seventh inflow in eight weeks. Meanwhile, European and Asian funds also saw substantial inflows, capturing $5.11 billion and $2.84 billion, respectively.

Global sectoral equity funds experienced net outflows for the third consecutive week, totaling $2.48 billion. Specifically, investors pulled out $810 million from healthcare funds, $639 million from consumer discretionary funds, and $480 million from metals and mining sector funds.

Global bond funds recorded net sales of $1.47 billion for a second consecutive week, following a streak of 51 successive weekly inflows that ended on Dec. 11.

Global high yield bond funds saw their largest outflow in eight months, with net sales amounting to $2.99 billion during the week. Conversely, investors injected $1.78 billion into short-term bond funds.

Investors added a net $16.95 billion to money market funds, reversing two weeks of net sales.

In commodities, gold and precious metal funds attracted a net $1.25 billion, marking the largest weekly inflow in nine weeks, while energy funds saw net sales of $212 million.

Meanwhile, data covering 29,565 emerging market funds indicated that equity funds continued their trend with net sales of $1.75 billion for a seventh consecutive week, and bond funds also experienced net outflows totaling $957 million.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Ros Russell)

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