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Global bond funds gain first weekly inflow in two months
Global Banking & Finance Review®
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(Reuters) – Global bond funds obtained inflows in the week to June 1 after eight weeks of outflows, lifted by strong demand as fears over aggressive monetary tightening and excessive price pressures eased.
(Reuters) – Global bond funds obtained inflows in the week to June 1 after eight weeks of outflows, lifted by strong demand as fears over aggressive monetary tightening and excessive price pressures eased.
Investors purchased a net $6.16 billion worth of global bond funds in their first weekly net buying since March 30, marking the biggest weekly inflow since Jan. 5, according to Refinitiv Lipper data.
Graphic: Fund flows: Global equities, bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnddaepq/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg
Last week, minutes from U.S. central bank’s most recent monetary policy meeting hinted potential for a pause in policy rate hikes later in the year.
Investors hope that U.S. jobs data due on Friday might sway the Federal Reserve to slow its current aggressive pace of interest rate hikes over the coming months.
Investors acquired U.S. bond funds of $7.09 billion, while European and Asian funds received inflows of $1.15 billion and $0.08 billion, respectively.
Global high yield bond funds drew $7.62 billion, the largest amount since at least July 2020, while government bond funds lured $4.54 billion.
However, investors disposed global short and medium-term bond funds worth $3.89 billion, recording outflows for the 21st subsequent week.
Graphic: Global bond fund flows in the week ended June 1 – https://fingfx.thomsonreuters.com/gfx/mkt/klpykoowxpg/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20June%201.jpg
Meanwhile, global equity funds had purchases worth a net $9.38 billion, the biggest since Feb. 9, amid robust demand for ETFs, which garnered inflows of $14.42 billion.
Among sector funds, healthcare, metals and mining as well as tech funds gained inflows of $1.19 billion, $445 million and $86 million, respectively, but financials lost $1.03 billion in outflows.
Money market funds, meanwhile, saw net selling of $40.99 billion, the biggest since April 13.
Graphic: Fund flows: Global equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/lgvdweeyypo/Fund%20flows-%20Global%20equity%20sector%20funds.jpg
Data for commodity funds showed investors exited gold and precious metal funds worth $521 billion after purchases of $1.33 billion in the previous week. Energy funds also had small outflows.
An analysis of 24,309 emerging market funds showed investors purchased equity funds worth $167 million after seven weeks of net selling, but sold bond funds of $194 million.
Graphic: Fund flows: EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/egpbkwwdrvq/Fund%20flows-%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Amy Caren Daniel)
A bond fund is a type of investment fund that invests primarily in bonds and other debt securities. It allows investors to pool their money to purchase a diversified portfolio of bonds.
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation and stabilizing currency.
Inflows refer to the net amount of money that investors put into a fund over a specific period. Positive inflows indicate that more money is being invested than withdrawn.
A high yield bond is a bond that pays a higher interest rate than other bonds due to a higher risk of default. These bonds are often rated below investment grade.
An ETF, or Exchange-Traded Fund, is a type of investment fund that is traded on stock exchanges, similar to stocks. ETFs typically track an index, commodity, or a basket of assets.
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