Global equity funds snap three-week inflow streak

Jan 9 (Reuters) - Global equity funds ⁠recorded their ⁠first weekly ‍outflow in three weeks in the week through January 7 as investors trimmed risk on geopolitical concerns, U.S. rate uncertainty and ‍stretched valuations, especially in U.S. stocks.

LSEG Lipper data showed that global ​investors withdrew a net $6.07 billion from equity funds, the first weekly net outflow since December ​17, driven largely by massive sales in U.S. equity funds.

Investors are wary as the Federal Reserve balances a softening labour market against still-elevated inflation, signalling after last month’s rate ​cut that borrowing costs are unlikely to fall further in the near term.

Concerns over elevated valuations continued to weigh on some technology stocks, further ​dampening investor sentiment. Nvidia is down about 2.0% so far this week, while Broadcom has fallen roughly ‌4.4%.

Investors, meanwhile, pumped $11.98 billion into European equity funds, the biggest amount for a week since May 2025. Asian funds also saw ​a net $4.52 billion net purchase.

Money market funds ⁠witnessed $161.27 billion worth of weekly net purchase, the largest for a week since December 2024.

Bond funds attracted $17 billion during the ‌week after a marginal $865 million outflow, a week ago.

Short-term bond funds received $4.77 billion, broadly recovering a net $4.89 billion outflow in the prior week. Corporate and Euro denominated bond ‌funds also saw $1.5 billion and $1.33 billion worth of net purchases, respectively.

“While lower rates may mean ‌income opportunities are becoming scarce, quality bonds should continue to play an important role as a source of yield and diversification, among other strategies to boost income,” said Mark ‍Haefele, chief investment officer at UBS Global Wealth Management.

Gold and precious metals commodity funds recorded a modest weekly outflow of $268 ⁠million, ending an eight-week streak of net inflows.

Data covering 28,606 emerging market funds showed that investors poured $3.16 billion into equity funds, the most in six weeks, and added a further $1.1 billion to bond funds.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Toby Chopra)

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