In the seven days leading up to October 18, global stock funds had their sixth consecutive weekly outflow. This was attributed to the ongoing increase in U.S. bond yields, which increased expectations of further high interest rates due to positive economic data.
The possibility of escalating hostilities in the Middle East also caused investors to sell $7.7 billion worth of global equities funds throughout the week, prolonging the current selling trend.
U.S. benchmark yields rose as more proof that the US economy is still growing despite the Federal Reserve’s efforts to control inflation by raising interest rates was provided by consensus-topping retail sales data on Tuesday.
Equity funds in the United States and Europe had net withdrawals of $4.57 billion and $4.12 billion, respectively, while funds in Asia saw inflows of around $1.43 billion.
$2.05 billion was pulled out of sectoral stock funds, the sixth straight week of withdrawals. Particularly impacted were the IT, healthcare, and utilities industries, with outflows of $762 million, $803 million, and $920 million, respectively.
However, weekly inflows into global bond funds were only $80 million, a significant decrease from the $1.13 billion in net purchases made the week before.
$1.95 billion in government bonds and $127 million in corporate bond funds were purchased by investors. Nonetheless, there was a consistent withdrawal of $2.73 billion from high-yield funds, which is the sixth week in a row of losses.
A huge $97.51 billion was taken out of money market funds by investors in the meanwhile, following two weeks of vigorous buying.
Commodity fund data showed that investors pulled out $1.02 million from precious metal funds, which was the 21st week in a row of withdrawals. Additionally, net selling of energy funds occurred, totaling around $25 million.
Data pertaining to 28,669 emerging market (EM) funds revealed a net disposal of $2.41 billion from EM equities funds for the week, which is the tenth week in a row of outflows. Furthermore, $657 million departed from EM bond funds—albeit at its lowest level in the previous five weeks.