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Global equity funds see $15.5bn outflow as oil surge stokes inflation fears
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In the week ending September 9, global equity funds experienced net outflows of $15.52 billion, the largest since March 18, driven by a U.S.-Iran conflict that pushed oil prices higher and intensified inflation concerns. U.S. equity funds saw net sales of $32.27 billion, while European and Asian equity funds posted net inflows of $11.16 billion and $3.03 billion, respectively. Brent crude hit a four-month high of $109.97 per barrel after breaking $100, sparking worries that persistent inflation would prompt major central banks to raise interest rates. The U.S. producer price report reinforced expectations that the Federal Reserve will hike rates next week. Sector funds attracted $2.92 billion, with technology and financial funds seeing net purchases. Global bond funds attracted $8.95 billion, the smallest weekly inflow since July 29, while money market funds received $10.72 billion. Gold and precious metals funds recorded net sales of $537 million after eight weeks of inflows, and emerging market equity funds saw net sales of $1.56 billion, ending an eight-week buying streak.
Source report
Sept 11 (Reuters) — Global equity funds saw significant outflows in the week ending Sept. 9, as a U.S.-Iran conflict drove oil prices higher, intensifying market concerns about inflation and rising borrowing costs.
Equity Fund Flows
Data from LSEG Lipper showed global equity funds recorded net outflows of $15.52 billion for the week, the largest since March 18. This was primarily driven by net sales of $32.27 billion from U.S. equity funds. However, European and Asian equity funds posted net inflows of $11.16 billion and $3.03 billion, respectively.
Oil Prices and Inflation Concerns
Brent crude hit a four-month high of $109.97 per barrel on Friday, after breaking through the key $100 level on Wednesday. The surge sparked worries that inflation would remain persistently high, prompting major central banks to raise interest rates. The U.S. producer price report released Thursday — ahead of Friday's consumer price data — showed August inflation remained firm, reinforcing expectations that the Federal Reserve will hike rates next week.
Sector Fund Flows
In terms of sector funds, they attracted net inflows of $2.92 billion for the week, with:
- Technology funds seeing net purchases of $1.89 billion
- Financial funds recording net buys of $1.25 billion
Bond Fund Flows
Global bond funds attracted $8.95 billion, the smallest weekly inflow since July 29. Key movements included:
- Short-term bond funds drew $6.65 billion, the second-largest weekly inflow in three months
- Loan participation funds: $1.01 billion in net purchases
- Government bond funds: $743 million in net purchases
- Corporate bond funds: $2.37 billion in net sales
Money Market Funds
Money market funds received net inflows of $10.72 billion, marking the second consecutive week of buying.
Commodity Funds
Among commodity funds:
- Gold and precious metals funds recorded net sales of $537 million after eight weeks of inflows
- Energy funds attracted $211 million
Emerging Markets
In emerging markets, investors ended an eight-week streak of net buying, posting net sales of $1.56 billion. Bond funds received inflows of $537 million for the sixth consecutive week.
The data covers 28,984 funds.
Source: Reuters
Source
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