GRAPH-Global bond funds see biggest weekly outflow in 22 months


Jan 28 (Reuters) – Global bond funds saw strong outflows ahead of the Federal Reserve’s monetary policy meeting this week as investors expect the central bank to signal more rate hikes of interest this year.

According to data from Refinitiv Lipper, investors unloaded global bond funds with a net worth of $11.29 billion in the week ending January 26, the largest outflow since April 1, 2020.

US bond funds suffered net outflows of $7.04 billion, while investors sold European and Asian bond funds worth $3.59 billion and $0.03 billion respectively.

Global short- to mid-term and high-yield bond funds sold more than $5 billion each, the most in at least six weeks. However, government bond funds received a net inflow of $850 million.

Investors also sold $476 million in inflation-protected bond funds, marking the first weekly outflow since November 2020.

In its latest policy update on Wednesday, the Fed indicated it would likely raise rates in March, as widely expected, and reaffirmed its intention to end its pandemic-era bond purchases this months before launching a significant reduction in its holdings.

Meanwhile, investors sold $7.96 billion net of global equity funds, the first outflow in six weeks, amid rising tensions between Russia and Ukraine.

Global technology sector funds saw outflows of $1.97 billion during the week, the most in nearly three months, while industrial services and communications funds also faced net sales of $749 million and $393 million respectively.

Financial sector funds, however, attracted net inflows of $1.18 billion.

Global money market funds saw a net inflow of $389 million after two consecutive weeks of net sales.

Among commodities, precious metals funds generated $2.12 billion, their best week since August 2020, but energy recorded a third straight weekly outflow, worth $36 million.

An analysis of 24,067 emerging market funds showed that equity funds racked up $3.3 billion in inflows, the largest in more than 10 months, while bond funds faced outflows of $385 million.

Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan


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