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Global equity funds see massive weekly outflows on Fed rate worries

February 24, 2023By Reuters

Feb 24 (Reuters) – Investors withdrew a large amount of money out of global equity funds in the seven days ended Feb. 22, spooked by prospects of a longer-than-anticipated tighter monetary policy from the Federal Reserve following stronger economic data coming out of the US

Data released during the period showed upbeat US business activity in February and a drop in weekly jobless claims, cementing views that the Fed would keep raising interest rates for longer.

Investors offloaded a net USD 6.43 billion worth of global equity funds during Feb. 16-22 after USD 1.47 billion worth of net selling during Feb. 9-15, Refinitiv Lipper data showed.

Investors exited US, European and Asian equity funds worth USD 6.73 billion, USD 750 million and USD 540 million, respectively, during the seven days ended Feb. 22.

Healthcare and technology sectors saw USD 737 million and USD 655 million worth of outflows, while investors put in about USD 312 million into consumer staples.

Global bond fund inflows were valued at USD 2.11 billion, the smallest in eight weeks.

Government bond funds saw a surge in demand as they received USD 6.85 billion, the biggest amount in seven months. Investors also drew USD 1.75 billion worth of short- and medium-term bond funds but disposed of high-yield funds worth USD 7 billion.

Meanwhile, global money market funds had USD 7.88 billion worth of net selling, marking their third straight week of outflows.

Among commodity funds, investors bought USD 163 million worth of energy funds for a fourth straight week of net purchases but exited USD 369 million worth of precious metal funds.

Data for 23,767 emerging market funds showed equity funds secured their seventh weekly inflow, worth USD 2.52 billion, while bond funds faced USD 1.08 billion worth of outflows.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shounak Dasgupta)

This article originally appeared on reuters.com

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