Investors rush to money market funds in days before Russia’s Ukraine invasion

2 mins read
Illustration shows Russian Rouble and U.S. Dollar banknotes

– Investors rushed for the safety of global money market funds while ditching equities for a second week in the seven days to Feb. 23 as risk aversion dominated markets in the run up to Russia’s invasion of Ukraine.

Investors bought global money funds worth a net $11.51 billion, the first weekly inflow in seven weeks, Refinitiv Lipper data showed.

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

Aggressive selling in U.S. and European equity funds, a net $1.9 billion and $1 billion respectively, left global equity funds facing outflows, although Asian funds drew a net $1.63 billion.

Financials suffered outflows of $1.02 billion after eight weeks of inflows, while tech and consumer discretionary funds recorded $911 million and $613 million worth of net selling, respectively.

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

Investors withdrew money from global bond funds for a seventh week, although outflows were 85% down from the previous week at $8.47 billion.

Global short- and medium-term, and high-yield bond funds also recorded a seventh week of losses, worth $3.14 billion and $2.57 billion respectively, while government bond funds pulled in a net $419 billion in a sixth week of buying.

Meanwhile, inflation-protected bond funds posted outflows for a fifth straight week, although the lowest since Jan. 19.


Global bond fund flows in the week ended Feb 23 – https://fingfx.thomsonreuters.com/gfx/mkt/jnvwebynmvw/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Feb%2023.jpg

Among commodity funds, precious metal funds attracted $982 million in net purchases, the biggest inflow in four weeks, while energy funds drew a net $85 million in a third week of inflows.

An analysis of 24,208 emerging market funds showed investors purchased equity funds of $2.59 billion, a 22% gain over the previous week, while outflows from bond funds dropped to a three-week low of $50 million.

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

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan)

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