Global equity funds see US$20 billion weekly outflows, biggest in three months

Trader Joseph Stevens, foreground, works with colleagues on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

Global equity funds saw the biggest weekly selloff in three months in the week through March 18 as investors cut risk exposure ahead of major central bank meetings amid concerns over inflation and the economic fallout from the U.S.-Israeli conflict with Iran.

Global investors offloaded equity funds of a net $20.3 billion as they registered their most substantial weekly net sales since roughly $46.66 billion divestments in the week to Dec. 17.

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Major central banks, including the Federal Reserve, held rates steady but signaled tighter policy ahead, while the ECB may begin discussing rate hikes as early as April unless Middle East tensions ease.

Weekly outflows from U.S. equity funds surged to a net $24.78 billion, a 2-1/2 month high. European funds had outflows at $2.13 billion, while Asian funds received a net $5.45 billion in inflows.

Equity sectoral funds, meanwhile, received weekly inflows of $1.66 billion, with industrial and technology sectors attracting a significant $1.83 billion and $1.78 billion, respectively.

Demand for bond funds eased to an 11-week low as these funds attracted a net $5.49 billion worth of weekly investments.

Short-term bond funds and government bond funds still saw a notable $6.32 billion and $5.19 billion worth of net purchases, respectively.

Money market funds saw weekly net investments of $32.57 billion as safe-haven demand extended into an eighth successive week.

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Investors, however, divested approximately $5.19 billion worth of gold and precious metals commodity funds in their largest weekly net sales since at least August 2018.

In emerging markets, equity fund outflows eased to a net $127 million in the most recent week from about $2.8 billion recorded in the prior week. Bond funds suffered net sales of $2.83 billion, data for a combined 28,765 funds showed.