Business Essentials for Professionals


Huge Withdrawals From Global Equities Funds Were Seen In Advance Of The Fed Meeting

Huge Withdrawals From Global Equities Funds Were Seen In Advance Of The Fed Meeting
In the seven days leading up to June 12, there were significant withdrawals from global equities funds as investors withdrew capital cautiously in anticipation of a crucial U.S. inflation data and a Federal Reserve policy decision that might impact the short-term outlook for interest rates.
Global stock funds worth a whopping $14.67 billion were offloaded by investors throughout the week, marking their largest weekly net sales since April 17, according to LSEG data.
On Wednesday, the U.S. Federal Reserve maintained current interest rates and reduced its forecast for rate reductions this year. Global markets, however, were boosted by a lower-than-expected CPI figure.
Particularly, U.S. stock funds saw significant withdrawals as investors sold a net $21.93 billion during the week—the largest amount since December 2022.
In contrast, inflows into European and Asian equities funds totaled $4.48 billion and $1.74 billion, respectively.
The IT industry pulled in $2.2 billion from sectoral funds, the most since mid-February, while the healthcare sector saw net selling of $509 million.
Simultaneously, global bond funds continued to be popular for a 25th week running, with a net accumulation of around $9.97 billion.
A noteworthy $2.44 billion was drawn to global corporate bond funds, the most since March 20. Additionally, a net $2.15 billion was invested in government bond funds by investors.
Money market funds witnessed inflows for a second week running, with a net gain of almost $25.65 billion.
Precious metal funds saw a net inflow of $127 million among commodities funds, marking their second consecutive weekly inflow. Nonetheless, investors sold out energy funds valued at $153 million.
A scant $57 million was taken out of equities funds, the first weekly net selling in six months, according to data covering 29,549 emerging market funds. In addition, bond funds saw net selling of $1.08 billion following net inflows of $819 million the previous week.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc