(Reuters) – Global equity funds witnessed sharp inflows in the week through February 26, spurred by sustained expectations of rate cuts later this year, which were bolstered by weaker economic data reported during the week.
LSEG Lipper data shows global equity funds saw a net $28.3 billion worth of inflows during the week, the highest amount since the week ending December 25, 2024.
U.S. equity funds received a hefty $19.71 billion, the largest weekly inflow in nine weeks. European and Asian funds also witnessed $4.33 billion and $3.25 billion worth of net purchases.
However, global markets have suffered steep losses this week on growing fears of trade war, intensified by U.S. President Donald Trump’s announcement on Thursday of a 25% tariff on Mexican and Canadian goods and an additional 10% duty on Chinese imports, to start from Tuesday.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said the U.S. Federal Reserve was likely to cut rates later this year as inflation moderates over time, despite selective tariffs.
“We favor U.S. equities and high-quality fixed income against such a backdrop, including five-year Treasuries and investment grade corporate bonds.”
Global bond funds remained popular for a ninth successive week, drawing a net $17.02 billion in inflows during the week.
Inflows in high-yield bond funds were the largest in about seven months, grossing about $3.28 billion on a net basis. Short-term bond funds also saw a robust $4.03 billion worth of additions.
Money market funds saw $39.76 billion worth of net purchases, for a third weekly inflow in four weeks.
Investors pumped a record $4.38 billion into gold and other precious metal funds, while ditching a net $395 million worth of energy sector funds.
Data on 29,541 emerging market funds showed that investors snapped up a net $1.64 billion worth of bond funds, the most for a week since February 5. They also invested $1.08 billion in equities for a second successive week of net buying.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Clarence Fernandez)
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