Global investors have significantly reduced their positions in Bond and Equity Funds In the week ending May 18 due to concerns regarding inflation and that higher interest rates will lead to a recession.
Investors recorded $18.57 billion in outflows from global bond funds, the largest weekly outflow since Feb. 16, according to Refinitiv Lipper.
The interest rate hike expectations come on the heels of comments made by US Federal Reserve Chairman Jerome Powell last week that the central bank will “continue to push” to tighten US monetary policy until it is clear that inflation is declining, according to “Archyde.com”, which has seen it. Al Arabiya.net”.
On the other hand, British inflation recorded its highest annual rate since 1982 in April, while Canada recorded a higher-than-expected jump.
US and European bond funds saw net sales of $8.41 billion and $8.14 billion, respectively, while Asian funds attracted small inflows of $0.06 billion.
Funds focused on short and medium-term bonds witnessed the nineteenth consecutive week of net selling, which amounted to $4.62 billion, while high-yield bonds witnessed exits of $5.17 billion.
However, government bond funds remained in demand as they attracted $5.45 billion last week, the third consecutive week of net buying.
Selling in global equity funds continued for the sixth consecutive week, although outflows at $6.26 billion were 54% lower than the previous week.
Among sectoral funds, consumer and financial funds lost an estimated $2.07 billion and $0.84 billion in outflows, respectively, but utilities and healthcare attracted $1.12 billion and $0.81 billion in inflows.
Investors also recorded a net sale in the money markets of $7.62 billion for the third week in a row.
Commodity funds data showed that investors dumped $1.57 billion of precious metal funds in the biggest weekly net sell-off in 14 months, while energy funds saw $249 million outflows.
An analysis of 24,262 emerging market funds showed that investors sold $1.38 billion worth of equity fund documents and $4.36 billion in bond fund documents, which represents the sixth consecutive week of net selling.
