Global investors step up selling in bond funds in the week to March 9

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FILE PHOTO: A person uses a petrol pump, as the price of petrol rises, in Lisbon

– Global bond funds saw big outflows in the week to March 9 due to a spike in crude oil prices and concerns over soaring inflation levels, amid intensifying conflict between Russia and Ukraine.

Investors offloaded global bond funds for the ninth week in a row, amounting $15.75 billion, which was 32% higher than in the previous week.

Graphic: Fund flows: Global equities bonds and money market:

Brent crude oil jumped this week to a 14-year high as U.S. President Joe Biden’s announcement of a ban on Russian oil and energy imports on Tuesday raised further concerns over surging crude prices.

However, crude prices eased later in the week, after the United Arab Emirates pledged to boost oil supply and it became clear the European Union would not join the United States and Britain in banning Russian oil. [O/R]

European bond funds suffered net selling of $8.2 billion, while U.S. funds and Asian bond funds witnessed outflows of $7.85 billion and $0.35 billion respectively.

Global high yield and, short- and medium-term bond funds posted outflows of $5.07 billion and $4.44 billion respectively.

However, government bond funds obtained $1.29 billion, while inflation-linked funds received $1.94 billion in inflows, a two-fold jump in purchases over the previous week.

Graphic: Global bond fund flows in the week ended March 9:

Meanwhile, investors disposed of global equity funds worth a net $9.22 billion in a second straight week of net selling, although outflows were 18% lower than the previous week, Refinitiv Lipper data showed.

Financial sector funds faced net selling of over $3 billion for a second successive week. However, mining and energy sector equity funds received inflows worth $1.1 billion and $0.88 billion respectively.

Graphic: Fund flows: Global equity sector funds:

Global money market funds received inflows worth $3.06 billion, underscoring investor caution during the week.

Among commodity funds, the demand for precious metal funds jumped to a six-week high as they obtained $1.67 billion in net buying, while, energy funds received $1.3 million.

An analysis of 24,111 emerging market funds showed equity funds had outflows worth $2.49 billion, while bond funds witnessed net selling for a fifth successive week, worth $1.03 billion.

Graphic: Fund flows: EM equities and bonds:

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Alison Williams)