(Reuters) – Global equity funds registered net outflows for the first time in three weeks in the week to Nov. 9, undermined by caution ahead of the U.S. midterm election results and the release of key inflation data.
According to Refinitiv Lipper data, investors exited a net $11.56 billion worth of global equity funds, after obtaining funds worth $13.98 billion in the previous week.
GRAPHIC: Fund flows: Global equities bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/lbpggrqywpq/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg
The U.S. and European equity funds recorded withdrawals worth $10.5 billion and $830 million respectively, although Asian funds saw net purchases of $290 million.
By sector, tech witnessed net selling worth $1.87 billion, the biggest outflow in 11 weeks, but financials and healthcare, both received inflows of about $450 million each.
The Federal Reserve raised interest rates by three-quarters of a percentage point earlier this month and said its battle against inflation will require borrowing costs to rise further.
“The Fed’s relentless inflation fight is adding more fear than normal,” said Gerry Frigon, president at Taylor Frigon Capital Management.
GRAPHIC: Fund flows: Global equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/lgpdkmrgavo/Fund%20flows-%20Global%20equity%20sector%20funds.jpg
Meanwhile, global bond funds saw net selling of $718 million after $989 million worth of inflows in the previous week.
Investors disposed of short- and mid-term bond funds for a 12th straight week, worth $1.68 billion while exiting high yield funds of $247 million.
At the same time, government bond funds received $2.33 billion worth of inflows after facing a weekly outflow.
GRAPHIC: Global bond fund flows in the week ended Nov. 9 – https://fingfx.thomsonreuters.com/gfx/mkt/klvygexllvg/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Nov.%209.jpg
Among commodity funds, precious metal funds recorded outflows for a fourth successive week, valuing $859 million, but energy and industrial metals funds, both gained small inflows.
Emerging market (EM) equities received $663 million in a second straight week of inflows but investors exited bonds funds for the 12th consecutive week with withdrawals worth $901 million, data for 24,741 EM funds showed.
GRAPHIC: Fund flows: EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/egvbynzebpq/Fund%20flows-%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Tomasz Janowski)