Global equity funds see higher outflows on rate hike concerns -Lipper

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Oct 1 (Businesshala) – Outflows from global equity funds increased in the week to September 29 on hopes that major central banks would raise interest rates soon, amid concerns that inflation could remain prolonged.

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Investors netted $1.21 billion in global equity funds in the week, compared to $174 million in net sales in the previous week, according to data from Lipper.

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Fund flows into global equity bond and money markets

Policymakers at the US Federal Reserve indicated last week that they were ready to raise rates in 2022 and that the bank could begin reducing its monthly bond purchases as early as next month. The central bank expected inflation this year at 4.2%, more than double its target rate of 2%.

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US equity funds faced net sales of $6.24 billion, although Asian and European equities made net purchases of $3.25 billion and $0.15 billion, respectively.

Global fund flows into equity sectors

Global bond funds saw net inflows for the 10th week in a row, although buying fell 22% from the previous week.

Global short- and medium-term bond funds drew a net $2.64 billion, the largest amount in four weeks, while inflation-protected funds drew nearly $1 billion, a three-week high, though government bond funds faced a small outflow of $26 million.

Global Bond Fund inflows for the week ending September 29

Investors made $22.1 billion in net sales to global money market funds, compared to $30.3 billion in net purchases in the previous week.

Among commodity funds, energy funds saw their first net inflows of $25 million in seven weeks, while precious metals funds faced a net outflow of $931 million.

An analysis of 23,682 emerging market funds showed investors sold $2.84 billion in bond funds and $2.46 billion in equity funds, marking the second week of net selling in each segment.

Fund flows in EM Equity and Bonds
Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Susan Fenton


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