Global equity funds see biggest weekly outflows since March 2020

Global equity funds have recorded their biggest weekly outflows since March 2020, hit by recession fears as central banks vow to keep interest rates higher to tame inflation.

Data from Refinitiv Lipper showed a net withdrawal of $33.6 billion in the week to Dec. 21. The US Federal Reserve and the European Central Bank raised interest rates in their final policy decisions of the year last week, with the Fed Chair saying the central bank would deliver more hikes in 2023 to combat inflationary pressures.

The Fed has delivered 400 basis points (bps) of rate hikes this year, and the European Central Bank a record 250 bps, reported Reuters.

The MSCI All Country stock index (.MIWD00000PUS) has fallen about 20% this year, more than reversing 2021’s 17% gain.