Global bond funds see higher outflows on rates outlook



Jan 21 (Reuters) - Investors stepped up selling in global bond funds in the seven days to Jan. 19 as hawkish remarks from U.S. Fed officials amid rising inflationary pressure solidified expectations that the central bank will tighten monetary policy as early as March.

Investors offloaded global bond funds of $4.12 billion, that topped previous weeks outflows by about 69%, Refinitiv Lipper data showed.

Two-year U.S. Treasury yields US2YT=RR , which track short-term interest rate expectations, rallied to a 23-month high this week after Federal Reserve officials last week signalled a policy rate hike in March.

Stoking fears that inflation may become more persistent, oil prices hit over a seven year high on Wednesday amid supply concerns and political tensions.

Investors sold U.S. and European bond funds of $1.69 billion and $2.55 billion respectively, although they purchased about $60 million worth of Asian funds.

Global high yield and short-and-medium term bond funds faced net selling of $2.63 billion and $0.83 billion respectively, which marked a second straight week of outflows.

Meanwhile, inflation protected, and government bond funds attracted inflows of $777 million and $528 million respectively.

Global investors remailed net buyers in equity funds with net purchases of $8.08 billion, although a five-week low.

Financial sector equity funds drew inflows for a fourth successive week, worth $2.85 billion, health care saw purchases of $511 million, however, investors sold tech and consumer discretionary funds of $886 million and $514 million respectively.

Global money market funds posted the biggest weekly net selling since at least end-Feb 2020, as they faced outflows of $80.12 billion.

Among commodities, precious metal funds attracted $328 million in inflows after an outflow in the previous week, although energy faced a second straight weekly outflow, amounting $60 million.

An analysis of 24,121 emerging market funds showed equity funds received $3.1 billion in net buying, the biggest inflow since mid-March 2021, while bond funds faced outflows of $2.07 billion.



Fund flows: Global equities bonds and money market Link
Global bond fund flows in the week ended Jan 19 Link
Fund flows: Global equity sector funds Link
Fund flows: EM equities and bonds Link



Reporting by Gaurav Dogra and Patturaja Murugaboopathy in
Bengaluru; Editing by Chizu Nomiyama

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.