Feb 6 (Reuters) – Global equity funds saw strong inflows led by Europe and Asia, underscoring a diversification push as investors sought to reduce exposure to volatile U.S. technology shares and spread risk across other markets.
Global equity funds saw net investments of $31.46 billion during the week, marginally lower than the prior week’s $35.03 billion net inflows, LSEG Lipper data revealed.
European equity funds drew about $14 billion in inflows, the strongest weekly demand since April 30, as the STOXX 600 hit a record high, while Asian and U.S. equity funds attracted $9.59 billion and $5.58 billion, respectively.
“Gains in Asian and European markets point to opportunities arising from regional fiscal expansion and structural reforms,” stated Mark Haefele, chief investment officer at UBS Global Wealth Management.
“In today’s environment, where risks are higher and outcomes less predictable, we believe diversification across sectors and geographies is especially important.”
In the sectoral space, industrials and metals and mining funds received $2.75 billion and $2.1 billion, respectively, and topped net purchases. The tech sector, meanwhile, faced outflows of $2.03 billion.
Global bond funds were popular for a fifth successive week, drawing in roughly $18.71 billion in net investments in the most recent week.
Short-term bond funds, euro-denominated funds, and high-yield funds saw significant purchaseing interest, with investors adding $2.79 billion, $1.9 billion, and $1.46 billion, respectively.
Money market funds, meanwhile, recorded a weekly net inflow of $90.75 billion, the largest since the $162.52 billion inflow in the week to January 7.
Investors also added $3.08 billion to gold and precious metals commodity funds, marking the largest weekly net purchases in six weeks.
In emerging markets, equity funds saw upbeat demand, drawing $11.89 billion in net purchases for the seventh straight week. Bond funds, however, had a modest $259 million outflow, according to data for a combined 28,709 funds.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Rashmi Aich)
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