Global Equity Funds See Biggest Weekly Outflows Since December
The comments below are an edited and abridged synopsis of an article by Reuters
Global equity funds faced massive outflows in the week to April 20, on concerns over growth due to the Russia-Ukraine war, impending rate hikes by major central banks and a rise in real yields.
Investors offloaded global equity funds worth a net $15.21 billion in the reported week, which was the biggest weekly money outflow since December 15.
The IMF slashed its forecast for global economic growth by nearly a full percentage point.
Investors exited US and European equity funds worth $16.06 billion and $1.35 billion respectively, but poured $1.41 billion into Asian funds.
By sector, health care, mining and utilities obtained $0.99 billion, $0.74 billion and $0.37 billion, respectively.
Global bond funds saw weekly outflows rising to a 5-week high of $12.76 billion, on rising bets that the Fed would be more hawkish than previously expected.
Some traders said investors were spooked by the latest call from Nomura, and analysts predicted the Fed would hike rates by 75 basis points in both June and July on top of a 50 basis point move in May.
Global short-term and medium-term bond funds recorded outflows of $5.45 billion and $2.76 billion respectively, while inflation-protected funds had a weekly inflow of $172 million.
The 10-year Treasury Inflation-Protected Securities’ (TIPS) yields briefly turned positive on Tuesday for the first time since March 2020.
Meanwhile, weekly money market outflows jumped to a 9-week high of $71.98 billion.
Precious metal funds gained $784 billion in a 14th straight week of inflow, while energy funds had an outflow of $328 million.
An analysis of 24,182 emerging market funds showed investors were net sellers in both equity and bond funds for second week in a row, discharging funds worth $458 million and about $1 billion, respectively.