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Global bond funds post biggest weekly outflow

Reuters . New York
22 May 2022 00:00:00 | Update: 22 May 2022 02:57:03
Global bond funds post biggest weekly outflow

Global investors massively cut their positions in bond and equity funds in the week ended May 18 on concerns of inflation and that rising interest rates will lead to recession.

According to Refinitiv Lipper, investors exited a net $18.57 billion worth of global bond funds, marking the biggest weekly outflow since Feb. 16.

Expectations of higher interest rates to come follow comments from U.S. Federal Reserve Chairman Jerome Powell this week that the central bank will “keep pushing” to tighten US monetary policy until it is clear that inflation is declining.

British inflation hit its highest annual rate since 1982 in April, while Canada reported a higher-than-expected jump.

US and European bond funds witnessed net selling worth $8.41 billion and $8.14 billion respectively, while Asian funds attracted small inflows of $0.06 billion.

Global short- and medium-term bond funds saw a nineteenth subsequent week of net selling, amounting $4.62 billion, and high yield funds had outflows of $5.17 billion.

Government bond funds however, remained in demand as they lured $5.45 billion in a third straight week of net buying.

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