(Reuters) – Global equity funds faced big outflows in the week to June 9, as investors were wary ahead of U.S. inflation data, spooked by worries that an upside surprise could prompt the Federal Reserve to start tapering its massive stimulus.
According to Refinitiv Lipper data, global equity funds faced net outflows of $12.8 billion, the biggest since the week ended April 28.
Graphic: Fund flows into global equities bonds and money markets – https://fingfx.thomsonreuters.com/gfx/mkt/xlbpgkmampq/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg
However, the outflows were mainly focussed on U.S. equity funds, which witnessed net sales of $17.5 billion, while Europe and Asian equity funds obtained inflows of $4.2 billion and $1.9 billion respectively.
Data released on Thursday showed U.S. consumer prices rose solidly in May, leading to the biggest annual increase in 13 years.
However, the jump was seen as not enough to change the Federal Reserve’s view that rising consumer prices will be transitory or alter its easy monetary policy.
Graphic: Global fund flows into equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/xegvbrbdwvq/Global%20fund%20flows%20into%20equity%20sectors.jpg
Investors sold $575 million in consumer discretionary sector funds and $288 million in utilities sector funds. Tech sector funds faced their first outflow in three weeks, the data showed.
However, financial sector funds had net purchases worth $1.5 billion, which was its second straight week of inflows.
In Asia, South Korean equity funds faced $2.2 billion worth of outflows on concerns that its central bank might tighten its monetary policy earlier than expected.
Meanwhile, global bond funds attracted $12.2 billion worth of net buying, despite worries over higher inflation levels.
Global money market funds also witnessed purchases worth a net $8.1 billion, recording inflows for the fifth straight week.
Global bond funds flows in the week ended June 9 https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqrdbbpx/Global%20bond%20funds%20flows%20in%20the%20week%20ended%20June%209.jpg
Among commodities, investors purchased $281 million worth of precious metal fund, which was a fifth straight week of inflows, while energy funds had outflows worth $250 million.
An analysis of 23,721 emerging-market funds showed equity funds had outflows worth $207 million, while bond funds attracted $1.2 billion, marking a second straight week of inflows.
Graphic: Fund flows into EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/xklvyajwrvg/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shailesh Kuber)