August 27, 2021
(Reuters) – Global bond markets saw their fifth consecutive week of inflows through Aug. 25, as investors grew cautious ahead of the U.S. Federal Reserve’s Jackson Hole meeting, waiting for what Chair Jerome Powell might say on Friday about stimulus tapering plans.
According to Lipper data, investors bought $10.97 billion in global bonds in the week to Wednesday, though it was slightly less than in the previous week.
Fund flows into global equities bonds and money markets https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkkolrpx/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg
Minutes from the Fed’s July meeting released last week showed most policymakers expect the Fed to start tapering bond purchases this year, though consumer sentiment and economic data have weakened since that meeting.
Safer government bond funds received $2.3 billion, up 22.5% from the previous week.
U.S. short and intermediate investment-grade funds saw inflows of $1.63 billion, their fourth straight week of inflows, while U.S. domestic taxable fixed income funds received $2.47 billion.
On the other hand, U.S. high yield bond funds saw outflows.
Global fund flows into equity sectors https://fingfx.thomsonreuters.com/gfx/mkt/xmpjooewzvr/Global%20fund%20flows%20into%20equity%20sectors.jpg
Global equity funds also had outflows worth $6.6 billion, after seeing net purchases in the previous four weeks, driven by higher sales of U.S. equities.
Among equity sector funds, tech funds received a net $1.43 billion, while materials sector witnessed outflows worth $500 million.
Among commodity funds, precious metal funds saw net sales of $1.33 billion, which was 86% higher than in the previous week. Energy funds witnessed outflows worth $104 million.
Global bond funds’ flows in the week ended Aug 25 https://fingfx.thomsonreuters.com/gfx/mkt/gkplggaygvb/Global%20bond%20funds’%20flows%20in%20the%20week%20ended%20Aug%2025.jpg
Global money market funds saw outflows of $1.56 million during the week.
An analysis of 23,786 emerging market funds showed investors offloaded a net $673 million in equity funds, which was their biggest net selling since end June, and sold $217 million in bond funds.
Fund flows into EM equities and bonds https://fingfx.thomsonreuters.com/gfx/mkt/mypmnnxlmvr/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill)