(Reuters) – Global equity fund outflows intensified in the week to September 29, amid expectations that major central banks would soon raise interest rates as inflation may persist longer long time.

According to Lipper’s data, investors sold $ 1.21 billion net of global equity funds during the week, up from a net sale of $ 174 million the week before.

Funds flock to global equity bonds and money markets: https://fingfx.thomsonreuters.com/gfx/mkt/byprjlwkkpe/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg

Policymakers at the U.S. Federal Reserve said last week that they were ready to hike rates in 2022 and that the bank would likely start cutting monthly bond purchases as early as next month. The central bank was forecasting inflation at 4.2% this year, more than double its target rate of 2%.

U.S. equity funds faced net sales of $ 6.24 billion, but Asian and European stocks attracted net purchases of $ 3.25 billion and $ 0.15 billion respectively.

Global funds flock to equity sectors: https://fingfx.thomsonreuters.com/gfx/mkt/lbpgngeblvq/Global%20fund%20flows%20into%20equity%20sectors.jpg

Global bond funds posted net inflows for the 10th week in a row, although purchases were down 22% from the previous week.

Global short- and medium-term bond funds attracted net $ 2.64 billion, the highest in four weeks, while inflation-protected funds attracted around $ 1 billion, a three-week high , although government bond funds faced small outflows of $ 26 million.

Global Bond Fund Flows for the Week Ended September 29: https://fingfx.thomsonreuters.com/gfx/mkt/egvbkyxalpq/Global%20bond%20funds’%20flows%20in%20the%20week%20ended%20Sep% 2029.jpg

Investors sold global money market funds to the tune of $ 22.1 billion net, up from $ 30.3 billion in net purchases the week before.

Among commodities funds, energy funds posted their first net inflow in seven weeks at $ 25 million, while precious metals funds faced net outflows of $ 931 million.

An analysis of 23,682 emerging market funds showed investors sold $ 2.84 billion net of bond funds and $ 2.46 billion of equity funds, the second week of net selling in each segment.

Fund flows to emerging market equities and bonds: https://fingfx.thomsonreuters.com/gfx/mkt/lgpdwkznjvo/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bangalore; editing by Susan Fenton)

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