Investors rush to money market funds in days before Russia’s Ukraine invasion – Metro US

Investors rush to money market funds in days before Russia’s Ukraine invasion

Illustration shows Russian Rouble and U.S. Dollar banknotes
Illustration shows Russian Rouble and U.S. Dollar banknotes

(Reuters) – Investors rushed for the safety of global money market funds while ditching equities for a second week in the seven days to Feb. 23 as risk aversion dominated markets in the run up to Russia’s invasion of Ukraine.

Investors bought global money funds worth a net $11.51 billion, the first weekly inflow in seven weeks, Refinitiv Lipper data showed.

Fund flows- Global equities bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/movandkgzpa/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg

Aggressive selling in U.S. and European equity funds, a net $1.9 billion and $1 billion respectively, left global equity funds facing outflows, although Asian funds drew a net $1.63 billion.

Financials suffered outflows of $1.02 billion after eight weeks of inflows, while tech and consumer discretionary funds recorded $911 million and $613 million worth of net selling, respectively.

Fund flows- Global equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/zdvxokdzepx/Fund%20flows-%20Global%20equity%20sector%20funds.jpg

Investors withdrew money from global bond funds for a seventh week, although outflows were 85% down from the previous week at $8.47 billion.

Global short- and medium-term, and high-yield bond funds also recorded a seventh week of losses, worth $3.14 billion and $2.57 billion respectively, while government bond funds pulled in a net $419 billion in a sixth week of buying.

Meanwhile, inflation-protected bond funds posted outflows for a fifth straight week, although the lowest since Jan. 19.

Global bond fund flows in the week ended Feb 23 – https://fingfx.thomsonreuters.com/gfx/mkt/jnvwebynmvw/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Feb%2023.jpg

Among commodity funds, precious metal funds attracted $982 million in net purchases, the biggest inflow in four weeks, while energy funds drew a net $85 million in a third week of inflows.

An analysis of 24,208 emerging market funds showed investors purchased equity funds of $2.59 billion, a 22% gain over the previous week, while outflows from bond funds dropped to a three-week low of $50 million.

Fund flows- EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/gdvzybqoopw/Fund%20flows-%20EM%20equities%20and%20bonds.jpg

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan)