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Global equity funds record outflows for ninth straight week by Reuters

Global equity funds record outflows for ninth straight week by Reuters

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©Reuters. Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, U.S. January 5, 2023. REUTERS/Andrew Kelly

(Reuters) – Global equity funds recorded the ninth straight week of net outflows in the seven days ended January 4 as investors remained cautious ahead of the release of the Federal Reserve’s latest meeting minutes.

According to data from Refinitiv Lipper, global equity funds saw withdrawals worth $15.42 billion net, compared to disposals worth just $791 million the previous week.

Chart – Fund Flows: Global Equities, Bonds and Money Market – https://fingfx.thomsonreuters.com/gfx/mkt/lbpggorndpq/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg

Last year, investors withdrew $172 billion and $354 billion from global equity and bond funds, respectively, as US interest rates soared on the back of monetary policy hikes by the Federal Reserve.

Although the minutes of the Fed meeting released this week showed policymakers favoring a slower pace of rate hikes, inflation concerns remain as the US jobs market remains tight.

US equity funds suffered $20.72 billion in net sales, but investors bought European and Asian funds for $3.16 billion and $1.06 billion, respectively.

Chart – Flows: Global Equity Sector Funds – https://fingfx.thomsonreuters.com/gfx/mkt/lgpdklmwbvo/Fund%20flows-%20Global%20equity%20sector%20funds.jpg

Among the equity sector funds, technology, financials and health care recorded net sales of $710 million, $503 million and $415 million, respectively.

Meanwhile, investors secured $5.28 billion net worth of bonds in their first weekly net purchases since mid-August.

Short- and intermediate-term bond funds received a net $6.02 billion, their first weekly inflow in 20 weeks. Treasury funds also attracted $4.37 billion in inflows, but inflation-linked funds had outflows of $108 million.

Graph – Global bond fund flows for the week ended January 4 – https://fingfx.thomsonreuters.com/gfx/mkt/zjvqjeqkxpx/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Jan%204.jpg

Also, safer money market funds received about $113.37 billion in inflows for the second straight week.

Data for commodity funds showed that precious metals and energy funds received marginal inflows of $54 million and $4 million, respectively, after facing outflows the previous week.

According to data available for 24,528 emerging market (EM) funds, investors exited $901 million worth of equity funds.

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

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