Jan 28 (Reuters) - Global bond funds witnessed robust
outflows ahead of the Federal Reserve's policy meeting this
week, as investors anticipated the central bank would signal a
larger number of interest rate hikes this year.
According to Refinitiv Lipper data, investors offloaded
global bond funds worth a net $11.29 billion in the week ended
January 26, the biggest outflow since April 1, 2020.
U.S. bond funds suffered net outflows of $7.04 billion,
while investors sold European and Asian bond funds worth $3.59
billion and $0.03 billion respectively.
Global short- and medium-term and high-yield bond funds
witnessed selling of more than $5 billion each, the most in at
least six weeks. However, government bond funds received a net
$850 million inflow.
Investors also sold inflation-protected bond funds of $476
million, marking the first weekly outflow since Nov. 2020.
In its latest policy update on Wednesday, the Fed indicated
it was likely to raise rates in March, as widely expected, and
reaffirmed plans to end its pandemic-era bond purchases that
month before launching a significant reduction in its asset
Meanwhile, investors sold a net $7.96 billion of global
equity funds, the first outflow in six weeks, on rising tension
between Russia and Ukraine.
Global tech sector funds saw outflows of $1.97 billion
during the week, the most in nearly three months, while
industrial and communication services funds also faced net
selling of $749 million and $393 million respectively.
Financial sector funds, however, drew a net inflow of $1.18
Global money market funds recorded an net inflow of $389
million after two straight weeks of net selling.
Among commodities, precious metal funds pulled in $2.12
billion, their best week since Aug. 2020, but energy saw a third
straight weekly outflow, worth $36 million.
An analysis of 24,067 emerging market funds showed equity
funds accumulated $3.3 billion in inflows, the biggest in more
than 10 months, while bond funds faced outflows of $385 million.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in
Bengaluru; Editing by Kirsten Donovan)