© Reuters. FILE PHOTO: A picture illustration of U.S. dollar Swiss Franc British pound and Euro bank notes
(Reuters) – Global equity funds lured massive inflows in the week ended April 14, on optimism over a strong second quarter earnings, and a decline in U.S. yields due to tempered expectations about a rise in inflation levels.
Investments in global equity funds rose to $16.4 billion this week, the biggest in three weeks, while bond funds also had inflows of about $16 billion, according to Refinitiv Lipper.
Graphic: Global fund flows – https://fingfx.thomsonreuters.com/gfx/mkt/xklpyynlypg/global%20fund%20flows1.jpg
On the other hand, investors ditched safer money market funds, which faced outflows of $50 billion, the biggest since mid-December last year.
The U.S. Treasury yields dropped this week, helped by the release of U.S. consumer prices data which showed inflation was not rising wildly.
The expectations of higher inflation levels due to massive stimulus measures lifted U.S. yields to a 13-month high in March.
The decline in yields bolstered growth sectors such as technology, which attracted an inflow of $2.1 billion, the biggest in four weeks.
Graphic: Flows into global equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/bdwvkbzywpm/Flows%20into%20equity%20sectors.jpg
Hopes of higher second-quarter earnings also boosted equity inflows in the week.
Analysts expect profits for firms to show a 25% jump from a year earlier, according to Refinitiv IBES data, which would be the strongest performance for the quarter since 2018.
However, inflows into Asian equities were the lowest compared to other regions, due to a resurgence of COVID-19 cases in India, Philippines, Thailand and South Korea.
Indian equity funds had an outflow of $190 million this week, the biggest in three months, while South Korean equity funds also faced net sales of $618 million.
Among commodity funds, precious metal funds faced $641 million in outflows, a tenth straight week of outflows, as investors took higher risks, dumping safe haven assets.
Their rising risk appetites were also reflected in the inflows into emerging-market bond and equity funds, which attracted about $1.4 billion each in the week.
Graphic: Flows into EM bonds and equities – https://fingfx.thomsonreuters.com/gfx/mkt/azgvoxnenpd/Flows%20into%20EM%20equities%20bonds.jpg
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