Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Investors dump global bond and equity funds in the week ended Sep.21

Economy Sep 23, 2022 07:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: 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) - Investors withdrew money from global bond and equity funds in the week ended September 21, with caution creeping in ahead of the U.S. Federal Reserve meeting in which further rate hikes were expected to tame soaring inflation.

Investors exited a net $7.32 billion of global bond funds, marking their biggest weekly net selling since Aug. 31, data from Refinitiv Lipper showed.

 

GRAPHIC: Fund flows: Global equities bonds and money market https://fingfx.thomsonreuters.com/gfx/mkt/dwvkrxorjpm/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg

 

The Federal Reserve raised its benchmark rate by 75 basis points on Wednesday, the third such rise in a row, and officials project rates hitting 4.4% this year, which was 100 bps higher than what the Fed had projected three months ago.

"Sooner or later bond yields will peak, though timing this precisely is difficult. The market is currently expecting the terminal US fed funds rate to be reached by around March-June 2023," said Bimal Patel, senior fund manager at Canada Life Asset Management.

Global short- and medium-term bond funds saw their biggest weekly outflow in 11 weeks, amounting to a net $4.98 billion, while investors also exited a net $3.29 billion in high yield funds.

 

GRAPHIC: Global bond fund flows in the week ended Sept. 21 https://fingfx.thomsonreuters.com/gfx/mkt/lbpgnkqgovq/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Sept%2021.jpg

 

Meanwhile, global equity funds witnessed disposals worth $1.86 billion in a fifth straight week of net selling.

Financials and consumer staples lost $1.55 billion and $687 million respectively in outflows, but utilities and tech both obtained about $300 million worth of inflows.

"Energy, financials, and materials are still attractively valued when compared to the rest of the US equity market. Valuation multiples of these companies remains low, and they remain to be beneficiaries of the prolonged inflation and interest rate rising environment," said Eugene Barbaneagra, portfolio manager at SEI.

 

GRAPHIC: Fund flows: Global equity sector funds https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkrxkopx/Fund%20flows-%20Global%20equity%20sector%20funds.jpg

 

On the other hand, safer money market funds attracted investor interest as they obtained a net $28.23 billion, the biggest weekly inflow since July 6.

Data for commodities funds showed precious metal funds remained out of favour for a 13th week with net disposals worth $474 million. Investors also exited energy funds of $60 million.

An analysis of 24,559 emerging market funds showed investors sold $2.39 billion worth of equity funds, marking a 10th weekly outflow in a row, while also exiting $2.78 billion worth of bond funds.

 

GRAPHIC: Fund flows: EM equities and bonds https://fingfx.thomsonreuters.com/gfx/mkt/xmpjoazoqvr/Fund%20flows-%20EM%20equities%20and%20bonds.jpg

 

 

Investors dump global bond and equity funds in the week ended Sep.21
 

Related Articles

Stocks, dollar dip while oil gains on China hopes
Stocks, dollar dip while oil gains on China hopes By Reuters - Nov 29, 2022 1

By Sinéad Carew and Tom Wilson NEW YORK/LONDON (Reuters) - Wall Street lost ground on Tuesday as investors awaited guidance on the Federal Reserve's rate hiking path, while the...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email