(Reuters) - Global equity funds continued to see robust inflows, with the majority directed to European equity funds, which hit record highs fueled by hopes for peace in Ukraine and a surge in the defense sector due to anticipated increases in military spending.

Also, a U.S. inflation report suggesting that the Federal Reserve's preferred measure of prices might be cooler than anticipated, bolstered stock prices and fund inflows during the week.

Investors ploughed a robust $13.35 billion into global equity funds during the week, significantly outweighing $5.32 billion worth of net purchases the previous week, LSEG Lipper data showed.

European equity funds received $8.55 billion, the highest since mid-December 2024, with the pan-European STOXX 600 index rising about 8.5% so far this year.

Asian and U.S. equity funds also saw net $2.41 billion and $1.59 billion worth of inflows, respectively.

Investment activity in sectoral funds was mixed as investors snapped up financials and tech sector funds of $751 million and $745 million respectively, but ditched healthcare and consumer discretionary to the tune of $719 million and $683 million, respectively.

Global bond funds attracted an eighth consecutive weekly inflow, totaling $17.91 billion on a net basis.

Government bond funds gained a net $2.32 billion in inflows, the largest amount since October 30, 2024. High yield and loan participation funds with $2.66 billion and $1.79 billion worth of net purchases, also stood out.

Money market funds, meanwhile, witnessed a net $19.16 billion worth of withdrawals following two weekly inflows in a row.

In parallel, investors acquired a robust $1.75 billion worth of gold and precious metal funds, logging their largest weekly net purchase since January 2022. Energy segment funds saw a net $50 million worth of outflows.

Emerging market data for 29,531 funds showed equities attracted a net $237 million, halting a 14-week long trend of net outflows. Bond funds, meanwhile, drew $932 million, registering their seventh weekly inflow in a row.