GRAPHIC-Investors snap nine-week buying streak in global equity funds
Global equity funds experienced their first weekly outflow in 10 weeks, with investors withdrawing $4.48 billion due to concerns over tech valuations and optimism about U.S. interest rate cuts. U.S. and European equity funds saw significant divestments, while Asian equity funds received investments. Bond fund inflows cooled, and gold funds remained popular. Emerging markets saw strong equity fund inflows. AI remains a market driver, but high valuations pose risks.
Nov 28 (Reuters) - Global equity funds saw their first weekly outflow in 10 weeks in the week to November 26, as concerns about stretched valuations, particularly in the tech sector, outweighed optimism around expected U.S. interest rate cuts next month.
According to LSEG Lipper data, investors withdrew a net $4.48 billion from global equity funds as they registered their first weekly net sales since September 17.
In the most recent week, investors divested U.S. and European equity funds of $4.56 billion and $1.21 billion, respectively, but invested approximately $170.37 million in Asian equity funds.
Overall, global equities had a volatile November, with fears over stretched tech valuations and a record 43-day U.S. government shutdown weighing on sentiment.
“We continue to view AI as a market driver, but the sector will likely be assessed more selectively, and high valuations of many AI leaders carry disappointment risk,” said Vincenzo Vedda, chief investment officer at asset management firm DWS Group.
“For this reason, we remain broadly diversified and see gold as a relative hedge.”
Inflows in global bond funds, meanwhile, cooled to a 22-week low of $6.77 billion during the week.
Euro-denominated bond funds faced a net $3.58 billion outflow, the first weekly net sales since July 9. Short-term bond funds, however, gained $5.56 billion in a fourth successive week of net purchases.
Investors added $2.54 billion worth of money market funds as they ended a two-week selling trend.
Gold and precious metals commodity funds, meanwhile, stayed popular for a seventh straight week as these funds drew roughly $1.66 billion in weekly inflows.
In emerging markets, investors snapped up $3.34 billion worth of equity funds, the most since July 9. They also added a marginal $5.98 million worth of bond funds, data for a combined 28,793 funds showed.
Fund flows: Global equities, bonds and money markets
Fund flows: Global equity sectors
Weekly flows into global bond funds
Fund flows: EM equities and bonds
