Global equity funds see biggest weekly outflow in two months

Global equity funds suffered their biggest weekly net selling in two months in the seven days to March 1 as global stocks fell after strong US economic data stoked fears about further rises in interest rates.

The MSCI’s All-World index of global shares (.MIWD00000PUS) dipped 2.64% last week to record its worst week since Sept. 23 on worries about Federal Reserve rate hikes as data showed robust U.S. personal consumption and spending in January.

Global equities, however, recovered some lost ground on Friday after Atlanta Federal Reserve President Raphael Bostic said he favoured “slow and steady” quarter-point U.S. rate increases to limit risk to the economy, reported Reuters.

Data from Refinitiv Lipper showed global equity funds saw a net $13 billion worth of outflows in the week to March 1, the biggest amount since Jan. 4.

The U.S. and European equity funds witnessed $12.9 billion and $660 million worth of net disposals; however, Asian funds drew a net $1.35 billion worth of inflows.

The healthcare, tech and utilities sector funds booked $1.1 billion, $538 million and $450 million worth of outflows, respectively. Still, industrials drew $560 million in inflows.

At the same time, low-risk money market funds obtained $51.36 billion in net purchases, the most since Jan. 4.

Meanwhile, global bond funds accumulated $6.83 billion worth of inflows, compared with just $1.46 billion worth of net purchase in the previous week.

Government bond funds attracted $4.38 billion and corporate bond funds secured $3.56 billion with outflows from high-yield funds easing to a three-week low of $1.74 billion.