Global Equity Funds Weekly Outflow

(Reuters) – Global equity funds experienced their first weekly outflow in four weeks leading up to September 4, as cautious investors retreated due to concerns about global economic growth and the impending U.S. jobs report.

According to LSEG data, investors sold a net $4.93 billion worth of global equity funds during the week, marking the largest weekly net sales since June 12.

Economic Concerns

Investors were particularly worried about the U.S. economy after a report from the Institute for Supply Management (ISM) revealed that U.S. manufacturing contracted for the fifth consecutive month in August. Additionally, anticipation grew for the non-farm payrolls report, where a weak outcome could increase fears of a sharp economic downturn.

U.S. Equity Funds

For the fourth time in five weeks, investors offloaded a net $11.73 billion worth of U.S. equity funds. In contrast, European and Asian equity funds gained approximately $5.25 billion and $1.88 billion worth of inflows, respectively.

Sector Outflows

The technology sector experienced a significant outflow of $995 million after three weeks of inflows. Additionally, real estate and consumer discretionary funds saw outflows of $388 million and $304 million, respectively.

Safe Haven Investments

In response to market uncertainty, global investors turned to money market funds, injecting a massive $67.92 billion into these assets, marking the fifth consecutive week of net purchases. Simultaneously, global bond funds attracted a net $10.85 billion, continuing a streak of 37 weeks of net purchases.

The bond market saw strong interest, with $3.26 billion directed towards corporate bond funds—the largest inflow since July 17. Dollar-denominated medium-term bond funds and government bond funds also received net investments of $2.8 billion and $1.46 billion, respectively.

Precious Metals and Energy

Gold and other precious metal funds recorded net inflows of $792 million, remaining popular for four weeks running. Additionally, investors acquired a net $189 million in energy funds.

Emerging Markets

Data covering 29,588 emerging market funds revealed that equity funds faced a 13th weekly outflow totaling $419 million. In contrast, bond funds attracted $1.45 billion, the largest weekly inflow since July 10.