😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

Global equity funds post big outflows on Fed policy concerns

Published 09/22/2023, 08:45 AM
Updated 09/22/2023, 08:51 AM
© Reuters. Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, euro and Jordanian dinar banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

(Reuters) - Global equity funds recorded massive outflows in the seven days ending Sept. 20 on concerns that the Federal Reserve might maintain its tighter monetary policy for longer to curb inflation.

According to LSEG data, investors withdrew a net $4.52 billion out of global equity funds, the most in a week since August 23.

The U.S. Federal Reserve held interest rates steady on Wednesday but flagged the potential for an additional rate hike this year and fewer reductions next year.

Regionally, U.S. and European equity funds faced outflows of $6.64 billion and $130 million, respectively, while Asian funds attracted $1.93 billion, marking the 16th consecutive week of inflows.

By sector, financials and healthcare suffered $1.7 billion and $395 million worth of outflow, respectively, but the energy sector drew $334 million, the biggest weekly inflow since Sept. 2022.

Meanwhile, global bond funds saw purchases to the turn of $1.95 billion after about $330 million worth of outflows in the prior week.

Investors accumulated corporate bond funds of $1.46 billion in their biggest weekly net purchase since July 26. Government, and loan participation funds also had $652 million and $426 million worth of purchases, respectively.

On the other hand, investors sold $915 million of high yield funds, extending outflows into a second successive week.

The appetite for global money market funds waned, garnering just $598 million compared to the $14.2 billion acquired the preceding week.

© Reuters. Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, euro and Jordanian dinar banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

In the commodities sector, precious metal funds extended their outflow streak to 17 weeks, shedding $325 million. Energy funds also saw exits totaling $87 million.

Emerging market data, encompassing 28,228 funds, revealed that bond funds faced $1.11 billion in outflows, the largest in a month, while equity funds registered their sixth straight week of net sales, amounting to $968 million.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.