European equity funds log sharp outflows on tariff worries; US funds attract inflows (Reuters) -European equity funds came under selling pressure in the week through July 30 as a rally in regional stocks cooled, with investors growing cautious over the uncertain economic implications of the U.S.–EU trade deal and signs of weakening corporate earnings. However, a record-setting rally on Wall Street drew investors into U.S. equity funds. According to LSEG Lipper data, investors offloaded a net $41.12 billion worth of European funds in their largest weekly sales since at least 2018 but scooped up U.S. funds worth a net $6.34 billion to end a two week trend of net selling. They also added a net $3.05 billion into Asian funds. Some European capitals criticized the U.S.-EU trade deal struck last weekend, saying the headline 15% tariff on EU goods, up from a previous average of 1.47%, tilts in favor of the United States and offers little support for the bloc’s economic prospects. The Stoxx 600 index hit nearly a month’s low of 540.63 on Friday, while the S&P 500 closed 0.37% lower on the previous day’s trade after logging a fresh record high of 6427.02. Global equity sectoral funds saw a second successive weekly inflow, amounting to $1.65 billion. The financial, tech and industrial sectors received a significant $1.09 billion, $931 million and $691 million, respectively while healthcare witnessed a net $757 million in weekly sales. Debt oriented funds were popular for the 15th week in a row with a net $15.35 billion worth of investments in global bond funds. Short-term bond funds saw a massive $3.38 billion weekly inflow following a net $4 billion purchase the prior week. Euro denominated bond funds and government bond funds also witnessed a robust $2.85 billion and $1.5 billion weekly net purchase. Investors, meanwhile, withdrew $36.02 billion from money market funds in their largest weekly sales since May 28. In the commodities space, demand for gold and precious metals funds eased to a 10-week low, with a net $285.8 million in net inflows. Emerging markets saw upbeat demand, with investors snapping up $1.92 billion worth of equity funds, the most since July 2 and plowing in a net $1.31 billion into bond funds, data for a combined 29,684 funds showed. With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record. With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.

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European equity funds lead global inflows as U.S.-EU trade deal reduces uncertainty Investing.com - European equity funds are leading global equity inflows year-to-date at approximately 8% of total assets under management, according to a recent HSBC report. Global equity fund inflows have reached about 2% of total assets under management, marking the highest level since 2021. The rotation into European equities is supported by both ETFs and non-ETFs, with the latter historically pulling money out of the region. This shift likely indicates a change in investor outlook toward regional equities, HSBC notes. The US-EU trade deal announced on July 28, 2025, further reduces policy uncertainty and could support regional flows, though HSBC analysis indicates a potential 5% fall in overall net income for European corporates in aggregate for a 15% hike in import tariffs by the US. Healthcare emerges as a potential contrarian opportunity, being the most unloved sector by global funds on a 5-year z-score basis. Despite the sector’s underperformance against global equity benchmarks year-to-date, the pace of decline in funds’ sector holdings exceeds the fall in its benchmark weight. HSBC suggests a swift resolution of uncertainty related to ongoing US ’section 232’ investigations into semiconductors and pharmaceutical products could result in unwinding of relative underweight sector positioning. In Europe, regional funds are increasing their German allocations, approaching the highest level since late 2019. HSBC believes there remains scope for further investment, citing improving business sentiment, supportive monetary policy, and signs of economic recovery as positive factors for German equities on a relative basis. European Financials are highlighted as another sector with potential, with consensus turning more positive as evidenced by the sector having the highest EPS estimate momentum across all sectors in Europe. HSBC economists expect limited cuts in regional policy rates in the second half of 2025, which could support the sector, particularly banks. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record. With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.

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