By Patturaja Murugaboopathy
(Reuters) – Global equity funds see fourth straight week of outflows in week to May 264, hit by lingering concerns over the U.S. debt ceiling impasse and an economic slowdown.
Global equity funds saw $4.9 billion in outflows, the fourth straight outflow, according to Refinitiv Lipper data. U.S. equity funds saw outflows of $5.7 billion, while Asian and European funds saw inflows of $1.1 billion and $0.23 million, respectively.
Among sector funds, financials led with outflows of $1.5 billion, while real estate and energy sector funds posted net sales of $446 million and 264 million, respectively.
The debate over the debt ceiling between Republicans and Democrats could hurt the U.S. economy and if the impasse does spark a default, it could wipe billions of dollars from stocks, analysts say funds.
U.S. inflation data released on Wednesday showed weakening price pressures, but analysts remained cautious.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said lower-than-expected U.S. consumer price inflation in April doesn’t mean investors should brace for another outperformance in stocks.
“In fact, we think the outlook for equities looks more challenging as the bar is set higher for incremental performance at current high valuations,” he said .
“The risk-reward profile of high-quality bonds appears to be more attractive in our view, and we believe now is the time to build diversified fixed income exposures to add stability to investment returns.”
Global bond funds attracted $3.4 billion this week, their third straight week of inflows.
Government bond funds get $3. 01 billion, while high-yield bond funds and inflation-linked bond funds saw outflows of $1.5 billion and 264 billion.
Global money market funds continued to attract inflows for the third week in a row with inflows of $23.$23.$8 billion.
“We suspect money market flows are likely to remain strong until the U.S. debt ceiling showdown is resolved, confidence in stable returns from regional banks and a possible U.S. recession There’s less uncertainty around earnings revisions and downward revisions,” said Kendall Dilley, portfolio manager at Vineyard Global Advisors.
23, 446 Emerging market funds data show investors gaining a net $446 $10,000 stock fund, but exited a bond fund with net worth 446 $10,000.
