Global bond funds witnessed outflows for the ninth successive week in the week ended Oct. 19, as some higher-than-expected inflation readings raised worries that major global central banks would continue to raise interest rates aggressively.
According to Refinitiv Lipper data, investors disposed of a net $11.88 billion worth of global bond funds after offloading $12.87 billion worth in the previous week.
During the reported week, inflation data from the US and Britain showed that consumer prices rose more than expected in September, solidifying expectations that central banks will remain firmly in rate-hiking mode.
Investors exited European and US bond funds of $7.29 billion and $4.16 billion respectively but Asian funds obtained inflows worth $210 million.
Global short- and medium-term bond funds saw a ninth weekly withdrawal worth $5.69 billion, while high yield bond funds lost $1.9 billion in outflows.
Safer assets such as government bond funds and money market funds lured $5.33 billion and $26.71 billion, respectively.
Meanwhile, selling in equity funds eased to a nine-week low of $213 million as some US companies, including Goldman Sachs Group Inc, Netflix Inc and Johnson & Johnson, reported better than expected quarterly results.
The tech and financials sector funds gained inflows worth a net $460 million and $437 million respectively, after each facing outflows for at least three weeks.
Emerging market (EM) bonds and equities faced outflows worth $2.25 billion and $2.36 billion respectively, data for 24,664 EM funds showed.
Among commodity funds, precious metal funds had outflows of $1.93 billion after a small weekly inflow. Energy and industrial metal funds also witnessed small outflows.
Meanwhile, investors pulled an estimated $26 billion from hedge funds during the third quarter, according to data provider HFR, jarred by a global stock market plunge, soaring bond yields and geopolitical tensions.
That comes on top of a $27.5 billion outflow in the second quarter, the first time that hedge funds have seen consistant outflows from one quarter to the next since the height of the COVID pandemic in 2020, HFR numbers showed.
According to the data provider, the outflows were driven by a $12.4 billion decline in assets from hedge funds that take bets on the equity markets. However, money flowed out of every kind of hedge fund strategy, even if it was performing well.
MSCI’s World Stock Index is down about 26 percent so far this year and set for its biggest annual loss since the global financial crisis in 2008.
Major stock indexes continued to slide on Friday while US Treasury yields rose to multi-year highs on expectations that the Federal Reserve will continue to aggressively pursue inflation with a much tighter monetary policy.
Equity hedge fund strategies that HFR tracks saw $12.4 billion of outflows in the third quarter.
An index of event driven funds, which make bets on company mergers and acquisitions, saw $600 million of outflows during the quarter, HFR data said.
