Investors Bet on Strong Earnings Season

Global equity funds drew their largest weekly inflows in three weeks through August 19, attracting a net $22.01 billion in investments as investors remained optimistic about the strong earnings season.

Source: s.yimg.com

According to LSEG Lipper data, roughly 90% of MSCI World companies had reported second-quarter results, with combined net income rising 39.7% from a year earlier.

The surge in equity fund inflows was driven by investors’ confidence in the strong earnings season, which has been a key driver of market performance in recent months. As a result, global stocks were on track for their steepest weekly decline since mid-July on Friday, pressured by higher government bond yields, elevated oil prices, and renewed inflation concerns.

Regional Breakdown

By region, U.S. equity funds attracted $11.72 billion, their largest weekly inflow since July 29, while European and Asian equity funds saw net purchases of $4.70 billion and $2.96 billion, respectively.

Among sectoral funds, technology funds attracted $1.55 billion in inflows after a week of net outflows, while investors also bought $536 million in gold and precious-metals equity funds but sold $1.59 billion of financial-sector funds.

Bond Funds Continue to Attract Investments

Investors extended net purchases of bond funds for a 20th consecutive week, adding a net $15.42 billion. They bought a net $4.49 billion of hard-currency bond funds, their largest weekly purchase since July 8, and also saw notable inflows of $3.32 billion and $1.99 billion in short-term and government bond funds, respectively.

Weekly net inflows in money market funds stood at $3.71 billion, a three-week low.

Emerging-Market Funds Remain in Demand

Data on 28,980 emerging-market funds showed equity funds remained in demand for a sixth straight week, attracting $1.57 billion in inflows. Bond funds also drew a net $493 million, marking a third consecutive weekly inflow.