Global money market funds attract big inflows on inflation concerns -Lipper

[October 08, 2021]  (Reuters) - Global money market funds saw huge inflows in the week to Oct. 6, as investors favoured safety amid concerns over higher inflation, supply shortages and distress in the China property sector.

A nearly empty trading floor is seen at the New York Stock Exchange (NYSE) in New York, U.S., May 22, 2020. REUTERS/Brendan McDermid/File Photo

According to data from Lipper, investors purchased a net $13.95 billion in global money market funds in the week, compared with net selling of $21.85 billion in the previous week.

(Graphic: Fund flows into global equities bonds and money markets, https://fingfx.thomsonreuters.com/
gfx/mkt/lbvgnorlkpq/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg)

Oil prices touched multi-year highs this week, stoking concerns that inflation levels will rise further, which could prompt major central banks to hike interest rates earlier than expected.

Global equity funds attracted a net $6.4 billion worth of inflows, with Asia accounting for a major share of the purchases. Asian equity funds obtained $4.03 billion, while U.S. and European equity funds secured $2.85 billion and $1.2 billion respectively.

Japanese equity funds received a net $3.22 billion, the biggest weekly inflow since September 2020.

Among sector funds, financials and technology funds received a net $959 million and $780 million respectively, each marking a second straight weekly inflow, while health care funds saw outflows of $1.75 billion.

(Graphic: Global fund flows into equity sectors, https://fingfx.thomsonreuters.com/
gfx/mkt/lgvdwlmorpo/Global%20fund%20flows%20into%20equity%20sectors.jpg)

Global bond funds received inflows of $3.78 billion, down 43% from the previous week.

But global inflation protected funds secured $1.82 billion, the biggest since end July, though corporate bond funds faced an outflow of $1.54 billion.

(Graphic: Global bond funds' flows in the week ended Oct. 6, https://fingfx.thomsonreuters.com/
gfx/mkt/klpykzeqkpg/Global%20bond%20funds'%20flows%20in%20the%20week%20ended%20Oct.%206.jpg)

Among commodity funds, energy funds saw outflows of $275 million after small inflows in the previous week, while precious metals funds faced outflows of a net $188 million.

An analysis of 23,831 emerging market funds showed equity funds received their first weekly inflow in three weeks, worth a net $1.46 billion, while bond funds faced their third straight weekly outflow of $1.62 billion.

(Graphic: Fund flows into EM equities and bonds, https://fingfx.thomsonreuters.com/
gfx/mkt/egpbkmnjnvq/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill)

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