Global Equity Funds See Major Net Purchases

(Reuters) – Global equity funds experienced their largest weekly net purchases in over a decade for the week ending Nov. 13, driven by investor optimism that a decisive second-term mandate for Donald Trump would bolster corporate earnings and fuel U.S. economic growth.

Investors ploughed $49.3 billion into global equity funds, marking the highest net inflow amount since at least January 2014, according to LSEG Lipper data.

The MSCI World index reached record highs for three consecutive days following Trump's victory last week, although it has since retracted approximately 1.6% from those record levels amid expectations of a slower pace of U.S. Federal Reserve rate cuts.

Mark Haefele, chief investment officer at UBS Global Wealth Management, stated, "We continue to hold a positive view on global and U.S. equities and believe that the macro backdrop is favorable for this year’s equity rally to gain further ground."

Investors showed a significant preference for U.S. equity funds, with $37.37 billion in net purchases, marking the largest weekly net inflow in at least a decade. They also invested $11.28 billion into European equity funds, while withdrawing a modest $305 million from Asian funds.

The financial sector attracted $4.68 billion, the highest inflow in at least a decade. Additionally, funds worth $1.35 billion and $414 million were acquired in the industrials and consumer discretionary sectors, respectively.

Global bond funds remained popular for the 47th consecutive week, attracting approximately $5.37 billion in net inflows during the week. High yield and loan participation funds saw inflows of $2.65 billion and $1.49 billion, while the government bond funds segment faced $479 million in net sales.

Investors also pumped around $73.61 billion into global money market funds, following net purchases of $127.11 billion the prior week. Conversely, gold and precious metals funds faced a net outflow of $950 million, marking the second consecutive week of withdrawals.

Data from 29,683 emerging market funds revealed that investors withdrew $5.8 billion from equity funds, the largest outflow in 11 months, along with divesting $939 million from bond funds.