Global Equity Funds See Weekly Outflow Amid Economic Growth Concerns
Global equity funds saw their first weekly outflow in four weeks in the week ending September 4, as cautious investors pulled back amidst worries about global economic growth and ahead of a data-heavy week culminating in the U.S. jobs report. According to LSEG data, investors sold a net $4.93 billion worth of global equity funds during the week, marking their largest weekly net sales since June 12.
Investors were particularly concerned about the U.S. economy after a report from the Institute for Supply Management (ISM) on Tuesday revealed that U.S. manufacturing had contracted for the fifth consecutive month in August. Anticipation was also building for the non-farm payrolls report, with a weak outcome potentially heightening fears of a sharp economic downturn.
U.S. equity funds experienced a net outflow of $11.73 billion, marking a fourth weekly outflow in five weeks. In contrast, European and Asian equity funds still saw inflows of about $5.25 billion and $1.88 billion respectively.
The technology sector witnessed a significant $995 million outflow, while real estate and consumer discretionary funds also saw outflows of $388 million and $304 million respectively. On the other hand, investors sought the safety of money market funds, pouring in a massive $67.92 billion into these funds for the fifth consecutive week.
Global bond funds saw a net inflow of $10.85 billion, marking the 37th consecutive week of net purchases. Corporate bond funds attracted $3.26 billion, the largest inflow since July 17. Additionally, dollar denominated medium-term bond funds and government bond funds received $2.8 billion and $1.46 billion worth of net investments respectively.
Investors also showed interest in gold and other precious metal funds, with a net inflow of $792 million for the fourth consecutive week. Energy funds also saw inflows of $189 million. In emerging markets, equity funds experienced a net outflow of $419 million, while bond funds attracted $1.45 billion, the biggest weekly inflow since July 10.
In conclusion, the movement of funds in and out of various sectors and regions reflects investor sentiment towards global economic conditions. It is important for investors to stay informed and consider diversifying their portfolios to mitigate risks and capitalize on potential opportunities.