Global equity funds draw weekly inflows as AI rally boosts sentiment

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May 29 : Global investors returned to equity funds in the week to May 27 after a week of outflows, as a rally in AI-linked stocks revived demand, though caution over U.S.-Iran peace negotiations kept buying in check.

Investors bought a net $457.57 million in global equity funds, compared with a net outflow of $6.56 billion the previous week, LSEG Lipper data showed.

MSCI's World Index hit a record 1,129.06 on Friday, as the U.S. and Iran reached an agreement to extend their ceasefire, pending final approvals.

Technology stocks have been particularly in favour since last week after Nvidia highlighted robust demand for its flagship AI chips.

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By region, U.S. equity funds attracted a net $1.97 billion, while European funds also gained a net $678 million. Asian funds, however, recorded net outflows of $3.92 billion.

Sector funds attracted a net $5.14 billion overall, with technology and financials drawing a net $4.98 billion and $1.05 billion respectively.

Global bond funds extended their winning streak to an eighth week, pulling in a net $18.15 billion.

Short-term bond funds, euro-denominated bond funds and corporate bond funds led demand, attracting a net $3.67 billion, $3.16 billion and $1.4 billion respectively.

Money market funds saw net outflows of $4.46 billion, reversing net inflows of $18.12 billion the week before.

Precious metals funds, including gold, recorded a net $584 million in outflows, their fourth weekly decline in five weeks.

In emerging markets, equity funds shed a net $4.45 billion for a fifth straight week of outflows, while bond funds attracted a net $1.08 billion, data covering 28,882 funds showed.

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