News Digest: Global equity funds witness fourth week of outflows
May 19, 2023
Global equity funds saw a fourth successive week of outflows worth over $4.9 billion amidst fears of an economic slowdown in the United States and the debt ceiling deadlock. Meanwhile, US equity funds saw outflows worth $5.7 billion while Asian and European funds saw modest inflows of $1.1 billion and $0.59 billion, respectively.
Published reports said among the sector funds, financials led the outflows with $1.5 billion, real estate with $446 million and energy sector funds with $376 million. Market analysts blamed the deadlock between Democrats and Republicans over the debt ceiling for these outflows, arguing that the standoff could trigger a debt default that could wipe out billions of dollars from equities.
Meanwhile global bond funds saw inflows of $3.4 billion during the second week of May while government bond funds obtained $3.01 billion with global money market funds also attracting inflows for a third week, receiving $10.8 billion. Data for 23,973 emerging market funds indicated that investors received $838 million worth of equity funds but exited $622 million worth of bond funds.