The week ending July 20, global equities funds experienced their worst weekly outflow in five weeks due to investor caution ahead of critical central bank meetings when rate hikes are expected to be announced.
According to Refinitiv Lipper, investors sold global stock funds with a net of $13.79 billion, the largest weekly outflow since June 15.
To rein in the region's skyrocketing inflation, the European Central Bank increased its benchmark deposit rate by 50 basis points, above its guidance of a 25-basis-point increase.
At its meeting next week, the U.S. Federal Reserve is likely to raise interest rates by 75 basis points to balance the risks of persistently high inflation with the chances of a recession.
Investors withdrew $8.45 billion and $5.6 billion from U.S. and European equity funds, respectively, and deposited $740 million into Asian equity funds.
Financial, consumer discretionary, and metals and mining funds saw respective withdrawals of $995 million, $445 million, and $416 million, while healthcare funds saw inflows of $511 million.
Global bond funds continued to sell for a second week as investors liquidated $6.9 billion of assets.
After 15 weeks of inflows, government funds witnessed withdrawals of $2.49 billion, while net selling in short- and medium-term bond funds dropped to a 15-week low of $1.88 billion.
After two weeks of purchasing, investors liquidated money market funds totaling $1.34 billion.
In the commodities sector, gold and precious metal funds had a net outflow of $1.1 billion, a 63 percent increase from the previous week. In comparison, energy funds produced their fourth weekly outflow of $180 million.
A survey of 24,388 emerging market funds revealed that investors dumped stock funds worth $2.04 billion, the largest outflow in 10 weeks, while bond funds experienced their sixth consecutive weekly outflow of $2.13 billion.