Global equity funds record fifth weekly outflow in a row – Reuters

Traders work on the floor of the New York Stock Exchange (NYSE) as a screen shows Federal Reserve Board Chairman Jerome Powell during a news conference following a Fed rate announcement, in New York City, U.S., July 27, 2022. REUTERS/Brendan McDermid

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July 29 (Reuters) – Global equity funds witnessed weekly outflows for a fifth straight week in the week to July 27 on caution ahead of the U.S. Federal Reserve’s policy meeting and on lingering fears over a global recession.

According to Refinitiv Lipper, global equity funds booked net selling of $2.73 billion, although weekly outflows eased to the lowest in five weeks.

Fund flows: Global equities bonds and money market
Fund flows: Global equities bonds and money market

The Fed raised U.S. interest rates by 75 basis points on Wednesday, in a quest to cool the sharpest inflation since the 1980s and signalled “ongoing increases” in borrowing costs were still ahead despite evidence of a slowing economy. read more

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Also a cut in Russian gas flows to Europe and European Union leaders’ agreement on an emergency plan to curb demand, raised concerns. read more

European and Asian equity funds posted outflows of $2.58 billion and $0.55 billion respectively, while the U.S. equity funds drew a net $0.63 million in inflows.

Investors broadly withdrew out of sectoral funds with real estate, industrials, financials and tech recording outflows of $672 million, $593 million, $538 million and $267 million, respectively.

Fund flows: Global equity sector funds
Fund flows: Global equity sector funds

Meanwhile, safer money market funds obtained $3.52 billion in net buying after $3.05 billion worth of outflows in the week before.

Global bond funds suffered withdrawals worth $2.28 billion, in a third subsequent week of net selling.

Global bond fund flows in the week ended July 27
Global bond fund flows in the week ended July 27

Selling in short term funds surged to a three-week high of $4.43 billion, while government bond funds recorded outflows of $567 million after five weeks of net buying in a row.

However, high yield funds came into demand after two weeks of outflows, luring $5.32 billion in net buying, the biggest inflow since June 1.

Among commodities funds, gold and precious metal funds faced outflows of $549 million in a fifth weekly net selling, while energy funds outgo of $226 million.

An analysis of 24,429 emerging market funds showed, both equity and bond funds had outflows, amounting to $1.28 billion and $200 million respectively, although selling eased by 33% and 92% respective from a week ago.

Fund flows: EM equities and bonds
Fund flows: EM equities and bonds
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Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shailesh Kuber

Our Standards: The Thomson Reuters Trust Principles.

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