Global equity funds have attracted capital for the seventh consecutive week

Global equity funds recorded net inflows for a seventh consecutive week through November 4. Demand was supported by the fact that leading central banks left interest rates unchanged and oil prices declined. At the same time, major US and Asian markets fell amid growing concerns over the costs of rising investment in artificial intelligence infrastructure.

According to LSEG Lipper data, global equity funds saw net inflows of $38.63 billion during the reporting week — the highest weekly figure recorded since September 23.

Last week, the US Federal Reserve (Fed) and the European Central Bank (ECB) left their monetary policy rates unchanged. The ECB also signaled the possibility of another rate hike in December.

By region, European equity funds received the largest inflows — $13.25 billion, the highest figure since August 12. US funds attracted $14.81 billion, while Asian equity funds drew in $8.34 billion.

The decline in oil and natural gas prices helped boost interest in European assets. Since the start of the Iran war, rising energy costs had been fueling inflationary pressure in Europe, so the drop in prices came as a certain relief for investors. Brent crude futures fell by approximately 15.6% over the course of the week.

Against this backdrop, Europe's STOXX 600 index rose by 0.05% over the week. By comparison, the MSCI All Country World Index fell by 2.91%, while the MSCI All Country ex-Japan Asia Pacific Index dropped 4.69%.

By sector, inflows into technology funds fell to a three-week low of $623.61 million. By contrast, healthcare and financial sector funds attracted significant capital — $1.33 billion and $1.2 billion, respectively.

Positive momentum was also seen in the bond market. Global bond funds received net inflows of $9.91 billion, the highest figure since October 7. Government bond funds attracted $3.07 billion — a four-week high. High-yield, euro-denominated, and short-term bond funds drew in $2.02 billion, $2 billion, and $1.52 billion, respectively.

Particularly large inflows were recorded in money market funds, which received $172.71 billion. This is the highest weekly figure since April 2020 and suggests that some investors continue to favor relatively liquid, low-risk assets.

Commodity funds focused on gold and other precious metals attracted $269.79 million, partially offsetting the previous week's outflow of $1.54 billion. Energy funds attracted capital for a third consecutive week, this time pulling in $327.31 million.

Emerging market equity funds recorded net inflows of $1.91 billion, marking a fifth consecutive week of positive figures. However, emerging market bond funds saw outflows of $299.07 million.

The data, covering 29,229 investment funds, shows that despite investor caution in the technology sector and declines in US and Asian markets, global capital flows remain positive. At the same time, interest in European equities and relatively safer assets has increased.