GRAPH-Investors flee global bond funds as rate hike bets increase

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Feb 18 (Reuters) – Global bond funds recorded their biggest outflow in nearly two years in the week ending Feb. 16 as soaring inflation levels stoked bets that US interest rates would be raised more aggressively this year.

Investors dumped $56.63 billion worth of global bond funds in their biggest weekly net selloff since March 25, 2020, according to data from Refinitiv Lipper.

Investors feared bigger-than-expected U.S. interest rate hikes this year after data last week showed consumer prices in January posted the largest year-over-year increase in four decades.

The two-year US Treasury yield, which generally moves in line with interest rate expectations, gained more than 30 basis points this month.

US and European bond funds faced net sales of $44.75 billion and $8.55 billion, respectively, in the week to February 16. However, Asian bond funds attracted $0.11 billion in inflows.

Investors unloaded $7.17 billion in corporate bond funds and $6.81 billion in global high-yield bond funds, in their biggest net selloff in at least the past month. March 25, 2020. Inflation-protected bond funds also saw an outflow worth $0.98 billion.

Meanwhile, government bond funds attracted $3.49 billion, the biggest inflow in nine weeks.

Inflows into global equity funds fell to a three-week low of $1.12 billion during the week.

Funds in the utilities and healthcare sectors faced outflows of $642 million and $516 million respectively, though financial and technology funds got $1.3 billion and $419 million, respectively. of dollars.

Investors sold off global money market funds for $69.85 billion, posting their biggest net sale in four weeks.

Among commodities funds, precious metals saw a fifth weekly inflow, worth $540 million, the largest in three weeks, while energy funds attracted $42 million in net purchases.

An analysis of 24,113 emerging market funds showed that equity funds saw $2.09 billion in net purchases, down 49% from the previous week, while bond funds saw losses. outflows of $1.99 million.

Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Maju Samuel

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