March 27 (Reuters) – Global equity funds attracted their biggest weekly inflow in nearly 2-1/2 months in the week through March 25 after U.S. President Donald Trump delayed strikes on Iranian energy infrastructure, raising hopes of a temporary de-escalation and easing oil shock fears.
Investors acquired a net $37.77 billion of global equity funds in their largest weekly net purchase since February 18 after a two-week selling streak, LSEG Lipper data showed.
They bought a net $37.24 billion of U.S. equity funds as they halted a three-week selling trend. Asian funds also saw a net $5.23 billion weekly inflow, but European funds suffered outflows of $7.52 billion.
Global equities, however, tumbled around 1.6% on Thursday on Iran’s denial of any talks with the U.S., deepening doubts about the chance of a quick ceasefire in the nearly one-month-long war in the Middle East.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said investors should be cautious about expecting a swift resumption of energy flows through the Strait of Hormuz, though he did not foresee significant or lasting economic damage in the base case.
“This means long-term investors with well-diversified portfolios should stay invested,” UBS’s Haefele said.
Demand for debt-linked funds cooled to the lowest in nearly three months as investors poured just $2.53 billion into global bond funds.
High-yield and euro-denominated bond fund segments saw significant outflows of $4.75 billion and $2.11 billion, respectively, but investors pumped a record $11.1 billion into short-term bond funds.
Investors exited roughly $64.78 billion worth of money market funds as they ended an eight-week-long trend of net purchases.
Gold and precious metals commodity funds faced outflows for a fourth week, to the tune of $3.14 billion.
Emerging market funds witnessed selling pressure for a third week as investors withdrew $2.78 billion from equity funds and $1.73 billion from bond funds, data for a combined 28,796 funds showed.
(Reporting by Gaurav Dogra; with additional reporting by Patturaja Murugaboopathy in Bengaluru; Editing by Andrew Heavens)
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