Global bond funds receive biggest weekly inflow in nine months
(Reuters) – Global bond funds obtained their biggest weekly inflow in nine months and purchases in money market funds also surged in the week to Aug. 3, as investors favoured safety due to worries about the risk of global recession.
Also, jitters about an escalation in Sino-U.S. tensions over U.S. House of Representatives Speaker Nancy Pelosi’s visit to Taiwan, tempered investors’ appetite towards risky assets.
According to Refinitiv Lipper, global bond funds saw net purchases of $14.4 billion, the biggest weekly inflow since Nov. 3.
Meanwhile, money market funds also lured $7.03 billion, a 66% increase in inflows over the previous week.
GRAPHIC:Fund flows: Global equities bonds and money market (https://fingfx.thomsonreuters.com/gfx/mkt/byvrjyleeve/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg)
Data released during the reported week showed the growth in U.S. factory activity weakened to a two-year low in July. Figures from Europe and Asia also pointed to a slowdown or contraction in production activities amid a drop in demand, casting more worries over global growth.
Global government bond funds attracted $3.77 billion after an outflow in the previous week, while short- and medium-term bond funds received their first weekly inflow since Jan 5, amounting a net $1.59 billion.
GRAPHIC:Global bond fund flows in the week ended Aug 3 (https://fingfx.thomsonreuters.com/gfx/mkt/egpbkdyqwvq/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Aug%203.jpg)
However, global equity funds suffered outflows of $10.42 billion in a sixth straight week of net selling.
The U.S. and European equity funds witnessed withdrawals of $6.84 billion and $4.81 billion, respectively, but investors poured $0.86 billion in Asian funds.
GRAPHIC:Fund flows: Global equity sector funds (https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnagzmpq/Fund%20flows-%20Global%20equity%20sector%20funds.jpg)
Data for commodities funds showed, gold and precious metal funds recorded a sixth weekly outflow, valued at $382 million, while energy funds had a marginal outgo of $48 million.
An analysis of 24,414 emerging market funds showed, bond funds gained $954 million in inflows after seven weekly outflows in a row, but equity funds lost $534 billion in a third weekly outflow.
GRAPHIC:Fund flows: EM equities and bonds (https://fingfx.thomsonreuters.com/gfx/mkt/lgvdwykagpo/Fund%20flows-%20EM%20equities%20and%20bonds.jpg)
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shailesh Kuber)