Introduction
Global equity funds experienced their largest weekly inflow in seven weeks, driven by a U.S.-China trade war truce that has reduced the risk of a global recession.Context
During the week ending May 14, global equity funds attracted a robust net inflow of $19.57 billion, the highest since March 26. The ongoing trade negotiations led by U.S. President Donald Trump, particularly a tariff truce with China, have alleviated fears of a potential trade war that could severely impact the global economy.Developments
The report from LSEG Lipper highlighted several key trends:- U.S. equity funds received a net inflow of $12.86 billion, effectively ending a four-week trend of outflows.
- European equity funds saw net purchases of $3.29 billion, while Asian equity funds attracted $2.89 billion.
- Global equity sectoral funds recorded a net inflow of $3.77 billion, marking an end to a five-week selling streak, with significant investments in technology, industrial, and financial sectors—all exceeding $1 billion.
- Global bond funds generated a net inflow of $15.81 billion, the strongest weekly inflow since March 5. High-yield bond funds garnered $3.56 billion, the largest amount in seven months, while government bond funds attracted $2.28 billion and loan participation funds received $1.15 billion.
- In contrast, global money market funds faced net outflows of $32.22 billion, partially reversing the previous week’s $66.97 billion inflows.
- Gold and precious metals commodity funds reported outflows of $198 million for the third consecutive week, following an 11-week inflow streak.
Additionally, the analysis of 29,660 emerging market funds indicated that bond funds attracted approximately $1.52 billion, while equity funds drew $508 million, marking the third straight week of net inflows for both segments.