December 31, 2021
(Reuters) – Global equity funds drew massive inflows for a second week in the seven days to Dec. 29 as investors welcomed signs that the economic impact from the spread of the Omicron COVID-19 variant would not be as significant as feared.
The funds pulled in $30.08 billion in net buying, compared with purchases of $35.83 billion in the previous week, which was their largest weekly inflow in nine months.
Graphic: Fund flows: Global equities bonds and money market-https://fingfx.thomsonreuters.com/gfx/mkt/jnvwejejgvw/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg
The MSCI’s global equity index gained 4.3% in a seven-day rally up to Dec. 29 as investors cheered signs that Omicron is less likely to lead to hospitalization, and that some vaccines are effective against the variant.
Sentiments were also boosted by signs that governments are trying to limit economic damage by relaxing rules on isolation and delaying COVID curbs, rather than resorting to lockdowns.
U.S. equity funds secured $19.43 billion in net buying, while European and Asian funds attracted $5.62 billion and $1.44 billion respectively.
Among equity sector funds, financials received $1.3 billion in net buying, the most in 10 weeks, and healthcare attracted $332 million, although consumer staples, utilities and tech funds saw outflows of $380 million, $338 million and $285 million respectively.
Graphic: Fund flows: Global equity sector funds-https://fingfx.thomsonreuters.com/gfx/mkt/akvezezeqpr/Fund%20flows-%20Global%20equity%20sector%20%20funds.jpg
Investors purchased global bond funds of $10.79 billion, their biggest net buying in eight weeks.
Global high-yield funds pulled in $2.64 billion in net buying, the biggest inflow in seven weeks, while corporate bond funds drew $1.74 billion and inflation-linked funds $875 million.
Meanwhile, purchases in government bond funds dropped 51% from the previous week to $1.88 billion.
Graphic: Global bond fund flows in the week ended Dec 29-https://fingfx.thomsonreuters.com/gfx/mkt/klpykqkqmpg/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Dec%2029.jpg
Global money market funds witnessed their first weekly net purchase in three weeks, worth $37.82 billion.
Within commodity funds, energy funds saw outflows of $81 million, marking a third straight week of net selling, while precious metal funds faced marginal outflows of $2 million. An analysis of 24,066 emerging market funds showed equity funds attracted $2.18 billion, their largest weekly inflow in over two months, while bond funds received $386 million, the first inflow in three weeks.
Graphic: Fund flows: EM equities and bonds-https://fingfx.thomsonreuters.com/gfx/mkt/lgvdwjwjopo/Fund%20flows-%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra in Bengaluru; Editing by Jan Harvey)