Global equity funds see first weekly outflow in four weeks

9:10 am Friday, July 21st, 2023

(Reuters) – Global equity funds witnessed their first weekly outflow in four weeks in the week to July 19, reflecting concerns over slower growth in China and caution ahead of the Federal Reserve’s policy meeting next week.

According to Refinitiv Lipper data, global equity funds observed a net $2.67 billion worth of net selling in the week ended July 19, booking their first weekly outflow since June 21.

China’s economy grew at a frail pace in the second quarter, pointing to overall momentum faltering rapidly due to weakening demand at home and abroad.

Additionally, expectations of rate hikes strengthened following a report from the U.S. Commerce Department indicating strong core retail consumption.

Investors withdrew $3.04 billion from U.S. equity funds while purchasing Asian and European equity funds to the tune of $609 million and $336 million, respectively.

Sectoral equity funds attracted collective inflows of about $1.78 billion, with investors piling up tech, financial and industrial sector funds of $1.05 billion, $904 million and $793 million, respectively.

Meanwhile, global bond funds saw $5.29 billion worth of net purchases as inflows extended into a fourth successive week.

Global high-yield bond funds received a net $2.97 billion, the biggest amount since April 5. Government and corporate bond funds attracted $627 million and $724 million worth of inflows, respectively.

Investors also purchased money-market funds of about $2.86 billion, after a net $28.8 billion worth of selling in the previous week.

Data for commodity funds showed that investors exited $295 million worth of precious metal funds in the eighth straight week of net selling. They also sold energy funds worth a marginal $2 million.

Meanwhile, data for 24,134 emerging market funds showed equity funds received $1.1 billion, the biggest weekly inflow since May 3, while bond funds obtained about $568 million, marking a third straight weekly inflow.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by David Holmes)