Global Equity Funds See Outflows

(Reuters) – Global equity funds experienced their second weekly outflow in seven weeks by February 5, as investors grew cautious following U.S. President Donald Trump’s announcement of significant tariffs on Mexico, Canada, and China.

However, selling pressure eased after Trump postponed the tariffs on Canada and Mexico.

Investors sold a net $3.86 billion worth of global equity funds during the week, compared to a net $15.35 billion in purchases in the previous week, according to data compiled by LSEG Lipper.

Investors withdrew a net $10.71 billion from U.S. equity funds but allocated a net $4.86 billion to Asian funds and $1.88 billion to European funds.

Global equity sectoral funds, meanwhile, attracted about $2.9 billion in net inflows, marking a fifth consecutive weekly net purchase.

The financial and consumer discretionary sectors witnessed inflows for a fourth successive week, totaling a noticeable $2 billion and $911 million, respectively.

Global bond funds remained popular for the sixth successive week, attracting a robust $17.74 billion in net inflows for the week. Short-term bond funds continued to be in demand for the 18th week as investors contributed $4.14 billion into these funds. Loan participation funds and high-yield bond funds also attracted inflows of $3.03 billion and $1.62 billion, respectively.

Investors opted for $75.4 billion worth of money market funds following a net $40.64 billion in sales the previous week.

Among commodity funds, precious metals saw a net $563 million in sales, marking their third consecutive weekly outflow, while energy funds gained a net $100 million in inflows.

Data covering 29,598 emerging market funds showed that investors divested equity funds for the 13th consecutive week by $600 million, but accumulated a net $1.85 billion in bond funds for the fifth successive week of net purchases.