Global bond funds post biggest weekly outflow in more than three months

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A man is seen in silhouette wearing a protective face mask, amid the coronavirus disease (COVID-19) pandemic, walking near the financial district in New York, U.S., October 18, 2021. REUTERS/Shannon Stapleton

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May 20 (Reuters) – Global investors massively reduced their positions in bond and equity funds in the week to May 18 on fears of inflation and fears that rising interest rates could lead to recession.

According to Refinitiv Lipper, investors exited $18.57 billion net from global bond funds, marking the largest weekly outflow since Feb. 16.

Fund flows: global equities, bonds and money market

Expectations of higher interest rates ahead follow comments by US Federal Reserve Chairman Jerome Powell this week that the central bank will “keep pushing” to tighten US monetary policy until it is clear that inflation is falling. Read more

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UK inflation hit its highest annual rate since 1982 in April, while Canada reported a bigger-than-expected jump. Read more

US and European bond funds saw net sales worth $8.41 billion and $8.14 billion respectively, while Asian funds attracted small inflows of $0.06 billion.

Global short- and mid-term bond funds had a nineteenth week of net sales, amounting to $4.62 billion, and high-yield funds recorded outflows of $5.17 billion.

Government bond funds remained in demand, however, as they attracted $5.45 billion in a third straight week of net buying.

Flows of Global Bond Funds During the Week Ended May 18

Global equity fund sales continued for a sixth consecutive week, although fund 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 in outflows, respectively, but utilities and healthcare gained $1.12 billion and $0.81 billion. dollars in admissions.

Fund flows: global equity sector funds

Investors also sold money market funds worth $7.62 billion in a third straight week of net selling.

Data from commodities funds showed investors unloaded $1.57 billion from precious metals funds in their biggest weekly net sell-off in 14 months, while energy funds saw outflows of $249 million. of dollars.

An analysis of 24,262 emerging markets funds showed investors sold $1.38 billion in equity funds and $4.36 billion in bond funds, marking a sixth consecutive weekly outflow.

Fund flows: emerging market stocks and bonds
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Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; edited by Barbara Lewis

Our standards: The Thomson Reuters Trust Principles.

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