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Global investors withdrew big money out of equity and bond funds in the week ended June 15, on elevated concerns over rising inflation levels and chances of an economic recession due to aggressive tightening measures by major central banks.
According to Refinitiv Lipper, investors liquidated global equity funds worth a net $30.16 billion, marking their largest net selling since at least July 2020.
US consumer prices accelerated faster-than-expected in May, leading to the largest annual increase in nearly 40-1/2 years. It rekindled worries that inflation and rate hikes are going to smother economic growth for years and squeeze corporate earnings.
The Federal Reserve on Wednesday approved an interest rate increase of 75 basis points, its biggest policy rate hike since 1994, to stem a surge in inflation that US central bank officials acknowledged may be eroding public trust in their power.
Investors disposed US, European and Asian equity funds worth $21.54 billion, $6.97 billion and about $700 million, respectively.
Financial, tech and real estate sector equity funds faced outflows of $894 million, $439 million and $409 million respectively, but energy and utilities’ funds lured about $470 million each in net buying.
Meanwhile, global bond funds recorded outflows of $30.13 billion, the biggest for a week since at least July 2020.
