Global equity fund inflows ease on caution over political risks, U.S. shutdown

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(Reuters) -Global equity fund inflows cooled to a three-week-low in the week to October 8 as investors took a breather after the recent market rally amid risks surrounding the collapse of the French government and the ongoing government shutdown in the United States.

Investors bought just $2.03 billion worth of global equity funds during the week, nearly a 96% reduction from about $48.81 billion weekly net purchases the prior week, LSEG Lipper data showed.

Resilient demand for European equity funds, which drew a net $7.02 billion in the latest week, kept global flows positive even as U.S. and Asian funds saw outflows of $4.52 billion and $1.27 billion, respectively.

The tech, industrial and healthcare sectors saw strong buying interest as these sectors received a net $2.03 billion, $1.25 billion and $1.23 billion, respectively in inflows.

In contrast, investors divested financial sector funds of a net $1.3 billion, halting a three-week trend of net purchases.

Weekly inflows into global bond funds, meanwhile, jumped to nearly a five-year-high of $25.81 billion during the week.

Short-term bond funds, euro-denominated bond funds and corporate bond funds received approximately $5 billion each in inflows in the week. Government bond funds also saw a net $1.21 billion worth of net purchases.

Global money market funds drew a net $64.45 billion weekly investment, the highest amount for a week since August 6.

Among commodities, investors snapped up gold and precious metals commodity funds of $1.34 billion, logging their 19th weekly net purchase in 20 weeks.

In the emerging markets, investors pumped $2.38 billion into bond funds, the largest amount for a week since July 9. Equity funds saw approximately $484 million weekly net investments, data for a combined 28,423 funds showed.

(Reporting by Gaurav Dogra; Editing by Tasim Zahid)