Global Equity Funds See Inflows for Fifth Week Driven by Strong Earnings

Global equity funds experienced inflows for the fifth consecutive week, attracting $28.16 billion in the week ending October 21, as easing Treasury yields and robust early corporate earnings boosted investor confidence, according to LSEG Lipper data. This marks an increase from the previous week's inflow of $19.88 billion.

The 10-year U.S. Treasury yield declined by about 15 basis points last week and fell below the notable 5% threshold this week. Investors responded positively to corporate earnings reports that exceeded expectations. To date, approximately 18% of companies in the MSCI All Country World Index have reported earnings, with around 73% surpassing analysts' forecasts, as indicated by LSEG data.

Despite the influx of capital, the MSCI World Index fell 1.31% on Thursday after Meta announced robust earnings but also revealed plans to issue non-voting stock, raising concerns regarding its expanding capital commitments.

By region, Asian equity funds observed a notable inflow of $11.53 billion, their largest since at least December 2022. European equity funds attracted $9.14 billion, while U.S. equity funds saw inflows of $5.07 billion. In sector-specific investments, the technology sector attracted $5.05 billion, reversing the previous week's net sales of $4.77 billion. Conversely, consumer discretionary sector funds faced a $1.29 billion withdrawal, while healthcare sector funds gained $1.83 billion.

Global bond funds also remained appealing, garnering net inflows of $9.44 billion for the fifth week in a row. Swiss franc-denominated bond funds captured $6.8 billion, the highest weekly inflow since at least November 2024. Investors added $2.78 billion to short-term bond funds but pulled $1.68 billion from high-yield bond funds and $550 million from government bond funds.

Money market funds recorded inflows of $15.86 billion after experiencing outflows of $47.51 billion the prior week. In commodities, gold and precious metals funds saw net inflows of $1.29 billion, marking their fifth week of net purchases in six weeks. Additionally, $41.5 million was added to energy funds.

Data from 29,174 emerging market funds showed that investors purchased $6.28 billion in equity funds, the highest weekly net purchase since August 5, yet they withdrew a slight $48.72 million from bond funds.