FE Today Logo
Search date: 11-02-2023 Return to current date: Click here

Global equity funds see outflows on rate hike worries

February 11, 2023 00:00:00

Global equity funds witnessed their first weekly outflow in five weeks as a stronger-than-expected US jobs report raised concerns that the Federal Reserve would keep policy rates higher for longer than anticipated, reports Reuters.

Refinitiv Lipper data showed investors withdrew about $209 million from global equity funds in the week to February 8, marking their first weekly net selling since January 4.

The dollar index gained about 1.1 per cent last week, with the stellar January US payrolls report prompting investors to price in the risk of more hikes from the Fed.

US equity funds recorded outflows of $470 million, although investors purchased European and Asian funds of about $100 million each.

According to the data, healthcare, consumer staples and energy sectors faced outflows worth a net $1.23 billion, $501 million and $306 million, respectively, while financials received about $952 million in inflows.

Meanwhile, investors remained net buyers in bond funds for a sixth week, but the buying dipped to $4.52 billion, the smallest amount since Dec. 28.

Global short- and medium-term bond funds remained in demand for a third week as they received a net $2.38 billion. Still, investors exited $2.27 billion worth of government bond funds, marking their biggest weekly net selling since at least March 2021.

Global money market funds recorded outflows of $4.47 billion compared with the previous week's $1.12 billion net purchases.

Among commodity funds, investors poured $447 million into energy funds in a second straight week of net buying, while precious metal funds obtained a net $100 million after witnessing a weekly outflow.

Data for 24,697 emerging market (EM) funds showed equity funds secured a net $2.74 billion in a fifth successive week of net buying, while bond funds obtained a net $1.3 billion worth of inflows.

Share if you like