Global bond fund inflows decline amid inflation concerns – Lipper by Reuters

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© Reuters. FILE PHOTO: Dividers are seen in a trading post on the trading floor as preparations are made to return to trading on the New York Stock Exchange (NYSE) May 22, 2020. REUTERS / Brendan McDermid / File Photo

(Reuters) – Investments in global bond funds declined sharply in the week leading up to July 14 as a surge in US inflation rates raised concerns that rising price pressures could soon lead the Fed to hike rates.

Global pension funds received $ 5.2 billion in inflows over the period, down 72% from the previous week, according to data from Refinitiv Lipper.

Some analysts also said investors posted gains during the week after a prolonged rally in bond prices in the previous weeks.

Graphic: Fund flows into global reverse convertibles and money markets: https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzzxbavw/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg

Inflation-linked bonds continued to make money, sagging $ 553 million – the eleventh straight weekly inflow.

Meanwhile, inflows into global equity funds increased for the week as fears about the Delta variant of the coronavirus subsided.

The data showed that global equity funds received $ 2.4 billion in inflow, up 37% from the previous week.

UBS said a rebound in market sentiment from worries about peak growth and the spreading Delta variant helped US stocks hit near record highs this week.

He added that US stocks continue to be well supported by robust earnings growth.

Among the equity funds, health funds had their largest weekly inflow of $ 1.56 billion this year.

Consumer discretionary and financial sector funds saw outflows of $ 613 million and $ 449 million, respectively.

Chart: Global Fund Inflows in Equity Sectors: https://fingfx.thomsonreuters.com/gfx/mkt/azgpoqozdpd/Global%20fund%20flows%20into%20equity%20sectors.jpg

Global money market funds faced $ 18.6 billion outflows, suggesting investors were willing to take higher risks during the week.

Among the commodity funds, precious metals funds saw outflows of $ 197 million.

An analysis of 23,720 emerging market funds showed that investors sold $ 360 million to bond funds after two consecutive weeks of buying. They also sold $ 220 million to emerging market equity funds, their fourth straight weekly sale, the data showed.

Graphic: Fund flows into EM stocks and bonds: https://fingfx.thomsonreuters.com/gfx/mkt/jbyvrzgeyve/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg

Graphic: Global Bond Fund Flows For The Week Ending July 14th: https://fingfx.thomsonreuters.com/gfx/mkt/xlbvgqkzkvq/Global%20bond%20funds%20flows%20in%20the%20week%20ended%20July%2014.jpg

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