(Reuters) – Investments into money market funds surged to the highest this year in the week ended March 31, as investors favoured safety amid a fall in bond prices and fresh lockdowns in Europe, with the region grappling to contain a rising number of coronavirus infections.
Global money market funds received inflows of $44.7 billion in the week, the biggest since the week ended Dec. 30, data from Refinitiv Lipper showed.
On the other hand, equity funds obtained inflows of $17.6 billion, the lowest in three weeks, pressured by a surge in U.S. bond yields.
Overall, equity funds received net buying of $289.6 billion in the first quarter, the biggest since at least 2013, though the inflows slowed by the end of the quarter. (Graphic: Fund flows into global equities bonds and money markets, https://fingfx.thomsonreuters.com/gfx/mkt/gjnpwomynpw/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg)
In the last week, equity inflows were led by the financial sector which saw a net buying of 2.37 billion, while industrial sector received $1.1. billion, the biggest in four weeks.
Higher oil prices bolstered inflows into energy sector funds. However, precious metal funds continued to witness outflows due to a fall in gold prices.
Gold fell 11% in the first quarter of this year, marking its worst start to the year since 1982. (Graphic: Global fund flows into equity sectors, https://fingfx.thomsonreuters.com/gfx/mkt/azgvodobopd/Global%20fund%20flows%20into%20equity%20sectors.jpg)
Investments into China-focused equity funds dropped to $148 million in the last week, the lowest in three weeks, on concerns over sanctions imposed by the U.S. and its allies on officials in China’s Xinjiang region over allegations of human rights abuses, prompting retaliatory sanctions from Beijing.
Meanwhile, investors net bought $8.4 billion worth of global bond funds, which was about 19% higher than the previous week. boosted by inflows into U.S medium-term bonds and high-yield bonds. (Graphic: Global bond funds’ flows in the week ended March 31, https://fingfx.thomsonreuters.com/gfx/mkt/yxmvjwaxnpr/Global%20bond%20funds%20flows%20in%20the%20week%20ended%20March%2031.jpg)
An analysis of 23,671 emerging-market funds showed equity funds attracted $2.06 billion in inflows, a two-fold increase from the preceding week, while bond funds saw $981 million in outflows. (Graphic: Fund flows into EM equities and bonds, https://fingfx.thomsonreuters.com/gfx/mkt/oakpelbqdvr/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg)
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shailesh Kuber)