Global Equity Funds Post Inflow For 36th Week: Top 5 Picks

Aug. 19, 2017 4:02 PM ETUSAWX, RPGEX, VHGEX, OPPAX, MWEFX1 Comment
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Investors are increasingly shifting their focus toward global equity funds from domestic equity funds, following growth in several major economies. According to the latest fund flow report of the Investment Company Institute (ICI), stock funds investing globally have registered 36 straight weeks of inflows. In contrast, domestic equity funds have registered significantly strong outflows in seven of the last eight weeks.

Moreover, recently released economic data indicates that the world's major economies, including China and the Eurozone, are gradually gathering pace. Given their bullish economic backdrop, these countries offer lucrative investment propositions. Global mutual funds are excellent options for those looking to widen exposure across countries.

Details of Inflows

As per the latest ICI weekly fund flow report, domestic equity-based funds have seen heavy outflows, whereas global equity funds continued to attract investors this year. In the week ended August 16, total equity funds reported outflows of $2.698 billion. While domestic equity funds witnessed outflows of around $5.156 billion, international equity funds saw inflows of $2.458 billion.

According to Lipper's fund flow report for the week ended August 9, equity fund flows were mixed. Total inflows in international equity funds reached $541 million, while domestic equity funds posted outflows of $5.048 billion.

Why Buy Global Equity Funds?

If selected carefully, global mutual funds have the potential to offer secure and attractive investment opportunities. Different studies over the years have shown that a portfolio with both domestic and foreign securities helps in reducing risk while enhancing returns. Also, a steady decline in U.S. equity funds demand might encourage investors to consider diversifying their investments throughout the globe.

Additionally, several major European countries have recently posted steady economic growth. Per the Federal Statistics Office, the biggest economy of the Eurozone, Germany's GDP advanced 0.6% in the second quarter, marking twelve straight quarters of increase. Also, the second- and third-largest economies of

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