Global money market funds attract big inflows on inflation concerns -Lipper

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(Businesshala) – Global money market funds saw huge inflows in the week to October 6 as investors backed security amid concerns over high inflation, lack of supply and the crisis in the China asset sector.

FILE PHOTO: An almost empty trading floor is seen at the New York Stock Exchange (NYSE) in New York, US, May 22, 2020. Businesshala / Brendan McDermid / File photo

Investors bought a net $13.95 billion in global money market funds in the week, compared to $21.85 billion in net sales in the previous week, according to data from Lipper.

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(Graphic: Fund flows into global equity bond and money markets,)

Oil prices hit a multi-year high this week, raising concerns about a further rise in inflation levels, which could prompt major central banks to raise interest rates earlier than expected.

Global equity funds attracted net inflows of $6.4 billion, with Asia buying a major part. Asian equity funds received $4.03 billion, while US and European equity funds received $2.85 billion and $1.2 billion, respectively.

Japanese equity funds received a net $3.22 billion, the largest weekly inflow since September 2020.

Among sector funds, financial and technology funds reported net gains of $959 million and $780 million, respectively, each marking a second straight weekly inflow, while health care funds saw an outflow of $1.75 billion.

(Graphic: Global fund flows into equity sectors,)

Global bond funds received inflows of $3.78 billion, down 43% from the previous week.

But global inflation-protected funds garnered $1.82 billion, the biggest since late July, although corporate bond funds faced outflows of $1.54 billion.

(Graphic: Global bond funds inflows for the week ended October 6th)

Among commodity funds, energy funds saw an outflow of $275 million after smaller inflows in the past week, while precious metals funds faced a net $188 million outflow.

An analysis of 23,831 emerging market funds showed equity funds received their first weekly outflows in three weeks, with a net worth of $1.46 billion, while bond funds faced their third straight weekly outflow of $1.62 billion.

(Graphic: Fund flows in EM Equity and Bonds,)

Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill

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