U.S. equity funds shed $7.34 billion in the week to July 22, yet global equity funds still drew their ninth straight weekly inflow as investors bet on an upbeat earnings season. European funds led the buying, while short-term bond and money market funds saw outflows.
U.S. equity funds recorded net outflows of $7.34 billion in the week through July 22, running against broad global inflows into stocks. Investors worldwide bought a net $10.51 billion in global equity funds, a ninth consecutive week of inflows, though slightly below the previous week’s $12.48 billion, according to LSEG Lipper data.
The buying held up even as Middle East tensions escalated and semiconductor stocks weakened, with fund managers focused on a robust earnings season. Among sectors, technology-sector funds attracted a net $2.12 billion, a fourth straight weekly inflow, while financials and healthcare funds drew $1.7 billion and $1.36 billion.
Europe leads the inflows
European equity funds pulled in the bulk of the money as earnings optimism built. Investors bought a net $10.29 billion in European equity funds, after roughly $8.87 billion the previous week, while Asian funds took in $4.5 billion.
The pull toward Europe tracked its earnings outlook, where quarterly profits at blue-chip companies are estimated to grow at their fastest pace in more than three years, according to LSEG I/B/E/S data. Recruiter Randstad and energy firms TotalEnergies and Repsol all reported strong results.
Bonds and cash retreat
Bond funds moved the other way. Net investments in global bond funds fell to a 16-week low of $3.34 billion as renewed gains in crude oil prices heightened inflation concerns. Short-term bond funds recorded outflows of $5.75 billion after 13 consecutive weeks of inflows.
Money market funds stayed out of favour for a second week, posting net outflows of $40.97 billion. Investors did add a net $1.46 billion to gold and other precious metals funds, a second consecutive week of net purchases.
Source: Investing.com
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