Global bond funds post biggest weekly outflow in over three months
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[May 21, 2022] (Reuters)
- Global investors massively cut their
positions in bond and equity funds in the week ended May 18 on concerns
of inflation and that rising interest rates will lead to recession.
According to Refinitiv Lipper, investors exited a net $18.57 billion
worth of global bond funds, marking the biggest weekly outflow since
Feb. 16.
Expectations of higher interest rates to come follow comments from U.S.
Federal Reserve Chairman Jerome Powell this week that the central bank
will "keep pushing" to tighten U.S. monetary policy until it is clear
that inflation is declining.
British inflation hit its highest annual rate since 1982 in April, while
Canada reported a higher-than-expected jump.
U.S. and European bond funds witnessed net selling worth $8.41 billion
and $8.14 billion respectively, while Asian funds attracted small
inflows of $0.06 billion.
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Global short- and medium-term bond funds saw a nineteenth subsequent
week of net selling, amounting $4.62 billion, and high yield funds had
outflows of $5.17 billion.
Government bond funds however, remained in demand as they lured $5.45
billion in a third straight week of net buying.
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A man is seen silhouetted wearing a protective face mask, amid the
coronavirus disease (COVID-19) pandemic, walking near the financial
district of New York City, U.S., October 18, 2021. REUTERS/Shannon
Stapleton
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Selling in global equity funds continued for a sixth straight week, although
outflows at $6.26 billion were about 54% lower than the previous week.
Among sector funds, financials, and consumer discretionary lost $2.07 billion
and $0.84 billion respectively in outflows, but utilities and healthcare gained
$1.12 billion and $0.81 billion worth of inflows.
Investors also disposed money market funds worth $7.62 billion in a third
consecutive week of net selling.
Data for commodity funds showed investors offloaded $1.57 billion worth of
precious metal funds in their biggest weekly net selling in 14-months, while
energy funds saw outflows of $249 million.
An analysis of 24,262 emerging market funds showed investors sold equity funds
of $1.38 billion and bond funds of $4.36 billion, marking a sixth weekly outflow
in a row.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by
Barbara Lewis)
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