(Reuters) – Global equity funds faced massive outflows in the week to April 20, on concerns over growth due to the Russia-Ukraine war, impending rate hikes by major central banks and a rise in real yields. According to Refinitiv Lipper, investors offloaded global equity funds worth a net $15.21 billion in the reported week, which was the biggest weekly money outgo since Dec 15.
Graphic: Fund flows- Global equities bonds and money market, https://fingfx.thomsonreuters.com/gfx/mkt/byvrjnrmqve/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg
The International Monetary Fund on Tuesday slashed its forecast for global economic growth by nearly a full percentage point. Investors exited U.S. and European equity funds worth $16.06 billion and $1.35 billion respectively, but poured $1.41 billion into Asian funds. By sector, health care, mining and utilities obtained $0.99 billion, $0.74 billion and $0.37 billion, respectively.
Graphic: Fund flows- Global equity sector funds, https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnyojjpq/Fund%20flows-%20Global%20equity%20sector%20%20funds.jpg
Global bond funds saw weekly outflows rising to a five-week high of $12.76 billion, on rising bets that the Federal Reserve would be more hawkish than previously expected.
Some traders said investors were spooked by the latest call from Nomura where analysts predicted the Fed would hike rates by 75 basis points in both June and July, on top of a 50-basis-point move in May. Global short- and medium-term bond funds, and high-yield bond funds recorded outflows of $5.45 billion and $2.76 billion respectively, while inflation-protected funds lured a eighth weekly inflow of $172 million.
The 10-year Treasury Inflation-Protected Securities’ (TIPS) yields briefly turned positive on Tuesday for the first time since March 2020.
Graphic: Global bond fund flows in the week ended April 20, https://fingfx.thomsonreuters.com/gfx/mkt/egpbkemjqvq/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20April%2020.jpg
Meanwhile, weekly money market outflows jumped to a nine-week high of $71.98 billion.
Commodities funds data showed precious metal funds gained $784 billion in a 14th straight week of inflow, while energy funds had an outflow of $328 million.
An analysis of 24,182 emerging market funds showed investors were net sellers in both equity and bond funds for second week in a row, discharging funds worth $458 million and about $1 billion, respectively.
Graphic: Fund flows- EM equities and bonds, https://fingfx.thomsonreuters.com/gfx/mkt/lgvdwgljxpo/Fund%20flows-%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shailesh Kuber)