Global Bonds and Money Market Funds Attract Flows Amid Growing Virus Concerns
Investors invested $ 16.4 billion in global bond funds and $ 14.9 billion in money market funds during the week ending April 21, according to data from Refinitiv Lipper, as concerns regarding a global increase in COVID-19 cases have prompted a move towards safer assets.
Inflows into global bond funds were about 2% higher than the week before, the data showed. The massive inflows into money market funds came after an outflow of $ 50 billion last week.
However, global equity funds posted inflows of $ 10.8 billion, about 33% lower than the week before.
The slowdown in cash inflows to equity funds came as investors began to question the high valuations of stocks amid increasing cases of coronavirus and its impact on the rebounding economy global.
The majority of equity inflows, however, were in European equity funds, which raised $ 8.2 billion, compared to $ 1.5 billion from Asian funds and $ 0.8 billion from American funds.
European stocks hit an all-time high this week, on expectations of higher earnings growth in the first quarter thanks to the recovery from the lockdowns.
Hit by rising coronavirus cases, Indian equity funds faced an outflow of $ 287 million in the week, according to data, their largest outflow in three months.
India reported the world’s highest daily tally of coronavirus cases for the second day on Friday.
In the commodities sector, safer precious metals funds faced their lowest outflow in 10 weeks, helped by falling bond yields and the weakening dollar.
Concerns about the economic recovery affected energy funds, which saw an outflow of $ 195.5 million, the largest in six weeks.
Emerging market equity funds faced their first exit in 30 weeks, while emerging market bond funds posted an inflow of $ 714 million, the lowest in three weeks.
Source: Reuters (Report by Patturaja Murugaboopathy edited by Raissa Kasolowsky)