Global equity funds attract big inflows at start of new year -Lipper

People wearing surgical masks walk past a screen showing Nikkei index outside a brokerage in Tokyo, Japan February 3, 2020. REUTERS/Kim Kyung-Hoon

Jan 7 (Reuters) - Global equity funds attracted massive inflows for a third straight week in the seven days to Jan. 5, as world stocks started the new year on a solid footing, shrugging off worries over the Omicron coronavirus variant and higher inflation.

Investors purchased global equity funds worth a net $19.01 billion in the period, data from Refinitiv Lipper showed, although that was down from $29.45 billion in the previous week.

Fund flows: Global equities bonds and money market

MSCI's global equity index (.MIWD00000PUS) hit a record high this week, with strong gains across the board from the United States to Asia.

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However, minutes of the Federal Reserve's most recent meeting, released on Wednesday, poured cold water on the rally as they pointed to a faster-than-expected rise in U.S. interest rates. read more

Tech stocks were also hit during the week due to a spike in U.S. Treasury yields.

U.S. equity funds attracted a net $8.98 billion in the week to Jan. 5, while European and Asian equity funds drew $7.25 billion and $0.43 billion respectively.

Financial funds drew $1.21 billion and healthcare received $564 million but tech funds saw a net outflow of $303 million in a third straight week of selling.

Fund flows: Global equity sector funds

Investors purchased global bond funds worth a net $14.95 billion, their biggest weekly net buying in four months.

Short- and medium-term bond funds pulled in $4.56 billion, their biggest weekly inflow in six months. High-yield bond funds received $3.05 billion while inflation-protected bond funds attracted $2.03 billion.

Net inflows into government-bond funds dropped to a three-week low of $1.04 billion.

Global bond fund flows in the week ended Jan 5

Global money market funds received inflows of $19.53 billion, a 51% decline from the previous week.

Among commodities, precious metal funds drew net inflows of $349 million while energy funds saw a marginal outflow of $2 million.

An analysis of 23,858 emerging market funds showed bond funds attracted a net $1.95 billion, their largest weekly inflow in nine months, while equity funds received $1.9 billion, a 30% increase over the previous week.

Fund flows: EM equities and bonds
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Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan

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