Global Equity Funds Surge Amid Rate Cut Expectations

Global equity funds experienced significant inflows due to anticipated rate cuts, with $28.3 billion invested over a week, the highest since late December 2024. Despite trade war fears, U.S., European, and Asian funds all saw considerable investments. Global bond funds and precious metal funds also witnessed notable inflows.

In a remarkable financial surge, global equity funds marked substantial inflows amounting to $28.3 billion in the week leading up to February 26. This influx, noted as the greatest since late December 2024, was largely driven by prevailing expectations of interest rate cuts, a sentiment fueled by weaker economic data during the same period.

The U.S. equity sector was a major beneficiary, attracting $19.71 billion in new investments, marking its largest weekly intake in nine weeks. Both European and Asian funds also recorded significant inflows at $4.33 billion and $3.25 billion, respectively, even as global markets teetered amid escalating trade war fears. President Trump's recent tariff announcements heightened these concerns, impacting investor sentiment.

Despite these trade tensions, Mark Haefele of UBS Global Wealth Management remains optimistic about rate cuts later in the year, citing an inflation slowdown. He maintains a preference for U.S. equities and high-quality fixed income. Concurrently, global bond funds saw a ninth consecutive week of popularity, while investments in precious metals surged, underscoring shifting investor strategies.

(With inputs from agencies.)