In the week leading up to August 24, global equity funds saw the largest weekly capital outflow in five weeks due to worries that rate hikes would trigger a recession.
Ahead of the annual Jackson Hole symposium of the Federal Reserve, which might shed light on the future course of the central bank’s policymaking, investors were also cautious.
Refinitiv Lipper reports that investors sold global equity funds for a net total of $10.48 billion last week, compared to just $3.15 billion in purchases the week before.
On Friday, Fed Chair Jerome Powell is scheduled to give the symposium’s keynote address. Investors will likely closely watch his remarks for any clues about how steep future interest rate increases might be.
Equity fund outflows were seen in all major regions, with net amounts of $5.17 billion, $2.19 billion, and $2.11 billion coming out of Europe, the United States, and Asia, respectively.
Outflows from sector funds totaled $2.04 billion, $735 million, and $595 million for the tech, industrials, and consumer discretionary sectors, respectively. Funds in the financials sector made $1.85 billion, while utilities made $588 million.
Bond fund withdrawals totaled $8.41 billion, the highest weekly total since June 29.
Investors sold $5.98 billion worth of high yield funds, their largest weekly net selling since June 15, while $894 million and $153 million, respectively, were pulled out of government and short- and medium-term funds.
In the meantime, weekly net selling in money market funds decreased to $375 million, a three-week low.
According to data from commodities funds, precious metal funds lost $354 million in a ninth consecutive week of net selling, while energy funds experienced a second weekly outflow, albeit a small $5 million one.
According to an analysis of 24,457 emerging market funds, investors sold $1.34 billion worth of equity funds, marking the largest outflow in five weeks, and $1.05 billion worth of bond funds, following three straight weeks of purchases.
(Adapted from USNews.com)