(Reuters) – Global inflation-linked bonds continued to attract buyers for the week ending May 19 as investors sheltered from rising consumer prices in the US.
According to Refinitiv data, bonds, the value of which is indexed to inflation metrics, attracted a net $ 1.92 billion, or about a third of total global bond inflows.
Riskier high yield bond funds saw their largest net outflow in 10 weeks at $ 2.69 billion. (Graphic: Fund flows into global reverse convertibles and money markets, https://fingfx.thomsonreuters.com/gfx/mkt/xegvbdgmevq/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg) (Graphic: Global bond flows for the week ending May 19, https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqblezpx/Global%20bond%20funds%20flows%20in%20the%20week%20ended%20May%2019.jpg)
Data released last week showed that in April, US consumer prices unexpectedly saw their sharpest spike in nearly 12 years, raising fears that the Federal Reserve may have to hike rates sooner than it currently expects.
Minutes from the Fed’s last meeting, released this week, said “a number” of officials may find it appropriate to “begin discussing a plan to adjust the tempo of asset purchases” if the economic one Recovery continues.
Heightened inflation worries also slowed inflows into global equity funds, which received $ 5.1 billion net, a 63% decrease from the previous week.
Specifically, investors sold US and Chinese equity funds, pushing outflows to $ 5.43 billion and $ 1.83 billion, respectively. (Graphic: Global Fund Flows into Equity Sectors, https://fingfx.thomsonreuters.com/gfx/mkt/xklvywrzovg/Global%20fund%20flows%20into%20equity%20sectors.jpg)
Technology funds saw net outflows of $ 2.4 billion, the highest since at least June 2019, while finance and mining funds received $ 1.6 billion and $ 750 million, respectively.
Investors poured $ 793 million into precious metals funds, marking their largest net buy in 15 weeks, when gold rose above a four-month high for the week.]
Meanwhile, global money market funds rose $ 7.94 billion, down 69% from the previous week. (Graphic: Fund flows into EM stocks and bonds, https://fingfx.thomsonreuters.com/gfx/mkt/bdwpkwmampm/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg)
An analysis of 23,804 emerging market funds showed that equity funds had net outflows of € 879 million.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathie in Bengaluru; editing by Kirsten Donovan)