Global Equity Funds Flows Return to Positive


As investors begin to pile back into stock exchange traded funds, global equity funds enjoyed their first week of positive inflows in seven weeks.

According to Refinitiv Lipper data, global equity funds attracted $2.75 billion in net inflows over the past week ended Wednesday, marking their first positive weekly inflow since June 22, Reuters reported.

Market observers have attributed this rebound risk-on sentiment to growing bets that the Federal Reserve may rein in its aggressive monetary policy outlook, following the slowdown in inflationary pressures, which should allow the economy to make a so-called soft landing or avoid a full-out recession.

Specifically, inflation data on Wednesday revealed U.S. consumer prices remained unchanged over July. In response, options traders were betting on a 50 basis point interest rate hike in the Fed’s upcoming September meeting, compared to the previously anticipated 75 basis point hike.

Looking at fund flows, U.S. equity funds attracted $4.21 billion in net inflows and Asian equity funds brought in $0.69 billion. However, European funds suffered $2.52 billion in outflows as the ongoing energy crisis in Europe fueled concerns of a potential recession in the region.

Among the most popular ETF plays over the past week, the SPDR S&P 500 ETF Trust (SPY) saw $6.4 billion in net inflows, the Invesco QQQ Trust (QQQ) brought in $1.8 billion, the Vanguard S&P 500 ETF (VOO) attracted over $860 million in net inflows, and the SPDR Portfolio S&P 500 Growth ETF (SPYG) added a little over $800 million, according to VettaFi data.

On the other hand, the JPMorgan BetaBuilders Europe ETF (BBEU) was among the most hated ETF plays over the past week, suffering close to $1.8 billion in net outflows.

Global bond funds also attracted another $5 billion in global net fund flows over the past week, the second straight week of positive inflows.

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