– Global bond funds saw money outflows for the tenth consecutive week in the week to March 16, as higher U.S. inflation levels evoked expectations that the Federal Reserve would need to act more aggressively to stem surging prices.
Investors jettisoned global bond funds worth $17.01 billion, after selling $15.75 billion in the previous week, Refinitiv Lipper data showed.
Graphic: Fund flows: Global equities, bonds and money markets: https://fingfx.thomsonreuters.com/gfx/mkt/xmvjoezjapr/Fund%20flows-Global%20equities%20bonds%20and%20money%20markets.jpg
The Fed announced a quarter of a percentage point increase to near-zero U.S. interest rates on Wednesday, and signalled it would hike rates more aggressively than expected to tame inflation, following a firm inflation reading last week.
The European Central Bank’s announcement of an end to asset purchases in the third quarter also weighed on sentiment.
European bond funds saw outflows worth $9.11 billion, while U.S. and Asian bond funds witnessed net sales of $7.24 billion and $0.4 billion, respectively.
Global high yield funds lost $4.88 billion in the biggest net selling in four weeks, while short- and medium-term, and government funds faced withdrawals of $3.95 billion and $0.88 billion respectively.
However, inflation-linked funds received $1.15 billion in a third straight week of inflows.
Graphic: Global bond fund flows in the week ended March 16: https://fingfx.thomsonreuters.com/gfx/mkt/zdvxoklkdpx/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20March%2016.jpg
Investors were also net sellers of global equity funds for a third consecutive week, as they withdrew $11.8 billion.
Global consumer discretionary, tech and industrial sector funds saw outflows of $1.28 billion, $0.88 billion and $0.79 billion, respectively, while health care and mining funds attracted inflows of $1.2 billion and $1.1 billion respectively.
Graphic: Fund flows: Global equity sector funds: https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgarampb/Fund%20flows-%20Global%20equity%20sector%20%20funds.jpg
Global money market funds experienced $44.68 billion in net selling after three consecutive weeks of inflows.
Among commodity funds, precious metals funds drew $1.39 billion in a ninth straight week of net buying, while energy funds pulled in $129 million in inflows.
An analysis of 24,062 emerging market funds showed equity funds lost $5.4 billion in the biggest weekly outflows since at least April 2020, while bond funds faced outflows of $1.38 billion.
Graphic: Fund flows: EM equities and bonds: https://fingfx.thomsonreuters.com/gfx/mkt/myvmnxdjdpr/Fund%20flows-%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by Barbara Lewis)
