BENGALURU- Demand for global equity funds shrank in the week through Jan. 1, as higher US Treasury yields led to caution and investors took profits during the year-end trading lull.
Data from LSEG Lipper showed that investors added a net $4.93 billion worth of global equity funds, an 86 percent drop in inflows compared with about $35.1 billion worth of net purchases in the prior week.
The MSCI World index which made a gain of over 15 percent in 2024, is down 1.5 percent this week after investors booked some profits following last year’s surge in stock valuations.
The increase in bond yields also dampened interest in equities, as the US 10-year Treasury yield rose to 4.641 percent last week, reaching its highest point since May 2.
By region, European, Asian, and US equity funds garnered net purchases of $2.25 billion, $1.64 billion, and $490 million, respectively, though inflows decreased from the previous week in all three regions.
Sectoral equity funds experienced outflows for a fourth consecutive week, totaling $2.35 billion. The largest withdrawals from tech, healthcare, and industrial sectors amounted to $453 million, $375 million, and $346 million, respectively.
Safer money market funds remained popular for a second successive week as they attracted $72.99 billion, the largest weekly inflow in four weeks.
Global bond funds experienced modest inflows as investors purchased government bond funds worth a net $878 million. Loan participation funds also attracted $320 million, whereas corporate bond funds saw net outflows of $573 million.
