Global bond funds record their first weekly exit in seven months, according to Lipper data

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People walk past an electronic screen showing global market indices outside a brokerage house in Tokyo, Japan, January 8, 2020. REUTERS / Issei Kato

October 15 (Reuters) – Global bond funds faced their first weekly outflow in seven months in the week to October 13, fearing higher inflation levels would prompt central banks to cancel support during the crisis earlier than expected.

According to Lipper’s data, investors sold net $ 2.3 billion in global bond funds, marking their first weekly net sale since March 10.

Fund Flows to Global Equity Bonds and Money Markets

The two-year Treasury yield, which typically moves according to interest rate expectations, peaked a year and a half at 0.394% this week, after data showed that prices at the consumption had climbed in September. Read more

However, inflation-protected bond funds, which serve as a hedge against falling prices for goods and services, attracted $ 1.83 billion, the largest in 2.5 months.

Global Bond Fund Flows for the Week Ended October 13

Meanwhile, global equity funds posted meager buying, taking in just $ 99.95 million, up from $ 6.36 billion the week before.

Chinese equity funds faced a fourth consecutive weekly outflow of $ 391 million, while Japanese equity funds reported net sales of $ 1.13 billion.

Among sector funds, financials received $ 1.63 billion, an increase of 70% from the previous week. Technology funds attracted $ 220 million, while communications services and equipment recorded outflows of $ 494 million and $ 285 million, respectively.

Global funds flock to equity sectors

Global money market funds received net inflows of $ 1.25 billion, up from $ 14.1 billion the week before.

Among commodities funds, energy funds received inflows of $ 243 million after exiting the previous week, while precious metals funds faced a third consecutive weekly outflow of $ 482 million.

An analysis of 23,430 emerging market funds showed that investors sold bond funds for a fourth consecutive week, worth $ 2.84 billion, and became sellers of equity funds, with sales net of $ 701 million.

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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