Global bond funds post biggest outflow since early April 2020 – Lipper

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A US dollar banknote is seen in front of the stock chart displayed in this illustration taken on May 7, 2021. REUTERS / Dado Ruvic / Illustration / File Photo

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December 17 (Reuters) – Global bond funds saw huge cash outflows during the week ended December 15, as investors expected major central banks to change the stance of their monetary policy during the major political meetings this week, under pressure from soaring inflation levels.

Investors unloaded global bond funds of $ 6.91 billion, marking their biggest weekly net sale since April 8, 2020, according to data from Refinitiv Lipper.

Fund Flows to Global Equity Bonds and Money Markets

Ahead of the Federal Reserve’s policy meeting that ended on Wednesday, the U.S. consumer price index accelerated 6.8% in the 12 months through November, marking the largest increase in ‘year after year since June 1982. read more

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The Fed, at its policy meeting this week, doubled the pace of cutting its monthly bond buying program and signaled three interest rate hikes next year. The European Central Bank has also reduced the pace of its bond purchases, while Britain has raised interest rates. Read more

U.S. bond funds reported net sales of $ 7.48 billion, although investors bought European and Asian bond funds for $ 1.45 billion and $ 0.19 billion respectively.

Global government bond funds posted $ 809 million outflows after seven straight weeks of inflows, although inflation-protected funds attracted $ 1.32 billion in net purchases, an increase of 39% compared to the previous week.

Global bond fund flows during the week ended December 15

Investors sold global equity funds for $ 13.14 billion, compared to net purchases of $ 3.43 billion the week before.

Among equity sector funds, tech funds had inflows of $ 1.91 billion compared to an outflow the week before. Funds for health care and materials received more than $ 400 million each, however, utilities faced net sales of $ 588 million.

Global funds flock to equity sectors

Global money market funds also recorded outflows, with a net worth of $ 20.46 billion, after eight straight weeks of inflows.

Within commodities funds, precious metals funds posted net sales of $ 402 million, recording a second straight week of cash outflows. Investors also sold energy funds for $ 96 million after two straight weeks of net buying.

An analysis of 24,070 emerging market funds showed bond funds posted outflows of $ 4.49 billion, the largest since March 25, 2020, as investors sold equity funds for $ 1. $ 51 billion.

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Cash flow to emerging market equities and bonds

Report by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru;

Our standards: Thomson Reuters Trust Principles.


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