Investors retreated from global bond funds on caution ahead of Fed decision
Reuters
Published Dec 15, 2023 06:14
(Reuters) - Investors pulled back sharply from global bond funds in the seven days through Dec. 13, amid caution ahead of the U.S. Federal Reserve's monetary policy decision and uncertainty over the timing of rate cuts.
Investors withdrew a net $6.91 billion, logging the biggest weekly net selling in global bond funds since Nov. 1.
They sold $4.41 billion worth of U.S. bond funds, extending outflows into a third week. European funds also had $2.99 billion worth of outflows, but Asian funds still attracted $177 million in inflows.
A significant uptick in U.S. Treasury yields last week followed the Labor Department's report of strong job growth in November, altering expectations about future rate reductions.
However, this week the 10-year Treasury yield has dropped about 27 basis points in the last two trading sessions after the Fed held rates unchanged and hinted at ending its tight monetary policy.
Global equity funds, meanwhile, secured $1.18 billion worth of inflows, a rebound from the $2.15 billion outflow observed the previous week.
Technology sector funds attracted $1.94 billion, the highest in three weeks, and consumer discretionary sector funds gained $811 million. However, healthcare sector funds saw net disposals of $994 million.
Global money market funds broke a seven-week-long streak of inflows, with $32.87 billion worth of net disposals during the week.
Among commodity funds, precious metal funds attracted $626 million, the most significant inflow in a week since November 1. Energy funds also drew $152 million, witnessing a third straight week of net buying.
Data encompassing 29,140 emerging markets funds showed equity funds remained under pressure for an 18th consecutive week with outflows totalling a net $2.11 billion during the week. Emerging markets bond funds also witnessed $551 million worth of net selling.
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Written By: Reuters
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