Global bond funds record outflows for ninth week in a row

Global bond funds witnessed outflows for the ninth successive week in the week ended Oct 19, as some higher-than-expected inflation readings raised worries that major global central banks would continue to raise interest rates aggressively.

According to Refinitiv Lipper data, investors disposed of a net US$11.88 billion worth of global bond funds after offloading US$12.87 billion worth in the previous week.

During the reported week, inflation data from the US and Britain showed that consumer prices rose more than expected in September, solidifying expectations that central banks will remain firmly in rate-hiking mode.

Investors exited European and US bond funds of US$7.29 billion and US$4.16 billion respectively, but Asian funds obtained inflows worth US$210 million.

Global short- and medium-term bond funds saw a ninth weekly withdrawal worth US$5.69 billion, while high yield bond funds lost US$1.9 billion in outflows.

Safer assets such as government bond funds and money market funds lured US$5.33 billion and US$26.71 billion, respectively.

Meanwhile, selling in equity funds eased to a nine-week low of US$213 million as some US companies, including Goldman Sachs Group, Netflix and Johnson & Johnson, reported better than expected quarterly results.

The tech and financials sector funds gained inflows worth a net US$460 million and US$437 million, respectively, after each facing outflows for at least three weeks.

Emerging market (EM) bonds and equities faced outflows worth US$2.25 billion and US$2.36 billion respectively, data for 24,664 EM funds showed.

Among commodity funds, precious metal funds had outflows of US$1.93 billion after a small weekly inflow. Energy and industrial metal funds also witnessed small outflows. REUTERS

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