(Reuters) – Global bond funds lured the biggest weekly inflow in more than three months as investors rushed for safety amid concerns that the spreading Delta coronavirus variant could cause the economic recovery to stall.
According to Refinitiv Lipper data, global bond funds received inflows worth $19 billion in the week to July 7, the biggest since the week ended April 7.
U.S. 10-year Treasury yields dipped to a 4-1/2 month low this week as investors sensed cracks in the economic recovery and cooling risks of high inflation.
Meanwhile, global equity funds received a net inflow of $1.9 billion, the smallest in a month.
Graphic: Fund flows into global equities bonds and money markets – https://fingfx.thomsonreuters.com/gfx/mkt/yzdvxlgbyvx/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg
U.S. equity funds faced an outflow of $5.2 billion, while European and Asian equity funds received inflows of $6 billion and $0.3 billion respectively.
The data showed funds that are focussed on Chinese equities, faced outflows, on concerns about China’s crackdown on local tech companies.
Among equity sector funds, healthcare and consumer cyclical funds secured $550 million and $405 million, while financial sector funds saw their fourth consecutive week of outflows.
On the other hand, investors put $30 billion in global money market funds, the biggest in six weeks, underscoring the risk-off sentiment in markets in the week.
Among commodity funds, energy funds faced outflows for a sixth consecutive week, while precious metal funds had their biggest inflow in six weeks, thanks to a surge in gold prices.
Graphic: Global fund flows into equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/jznpnymaevl/Global%20fund%20flows%20into%20equity%20sectors.jpg
An analysis of 23,668 emerging-market funds showed bond funds received a net $838 million, the largest inflow in four weeks, while equity funds saw outflows for a third straight week, worth a net $40 million.
Graphic: Fund flows into EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzzalqvw/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg
Graphic: Global bond funds flows in the week ended July 7 – https://fingfx.thomsonreuters.com/gfx/mkt/gjnvwqrdwvw/Global%20bond%20funds%20flows%20in%20the%20week%20ended%20July%207.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Edmund Blair)
