Asia Leads Global Equity Funds in Attracting Strong Weekly Inflows

Global equity funds saw a resurgence in investor interest in the week ending May 1, with a net inflow of $4.86 billion, the first positive week since March 27. The surge was driven by a strong inflow of $5.68 billion into Asian equity funds, the largest weekly inflow since March 27, signaling optimism about the economic recovery in the region, particularly in China.

On the other hand, European funds received $4.46 billion in investments, while U.S. funds experienced outflows of $5.48 billion. Federal Reserve Chair Jerome Powell’s decision to keep rates steady on Wednesday hinted at a delay in future rate cuts due to persistent inflation.

According to Mark Haefele, chief investment officer of global wealth management at UBS, the delay in Fed cuts may postpone rate cuts in Asian markets but will not hinder the ongoing growth recovery in the region, supported by a strong U.S. economy and improving Chinese growth.

Technology sector funds received a boost with $408 million in inflows, the first positive week in four weeks, while healthcare and consumer discretionary sectors faced net outflows. Bond funds also saw significant inflows of $6.69 billion, the highest in a week since April 10, with government bond funds leading the way.

Overall, the market showed signs of recovery and resilience, with opportunities for investors to consider despite market volatility. Bond funds, loan participation, mortgage bond funds, and inflation-linked bonds all attracted significant inflows, indicating a positive sentiment among investors.