Global bond funds attracted strong inflows, raising $12.8 billion over the week
Global investors reduced their holdings in equity funds for the second week in a row in the week ending April 10, by $2.9 billion, while pumping $12.8 billion into bonds, amid continuing concerns about inflation and declining expectations for a reduction in…interest rate on US Federal Reserve Board In June, as reported Reuters”.
Economic data showed US consumer prices rose more than expected in March, casting further doubt on whether the Federal Reserve will start cutting interest rates in June.
Global equity funds saw outflows of $2.9 billion during the week, while US equity funds saw outflows of $2.7 billion and Asian equity funds saw outflows of $1.9 billion.
On the other hand, European equity funds collected inflows amounting to $891 million.
Meanwhile, global bond funds attracted strong inflows, raising $12.8 billion over the week, driven by weak expectations for a near-term US interest rate cut.
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Mark Haefele, chief investment officer at UBS Global Wealth Management, revised his forecasts, expecting the Federal Reserve to cut interest rates by 50 basis points starting in September instead of June.
He said: “With 10-year US Treasury yields reaching 4.55% by the close of US stocks on Wednesday, we consider now an attractive time to secure returns. We maintain our preference for high-quality bonds.”
Medium-term dollar bonds saw strong inflows of $2 billion, while short-term US dollar government bonds received $1.3 billion. Loan participation funds received $686.6 million, while municipal funds in US dollars raised $505 million.
On the other hand, US dollar corporate bond funds saw outflows totaling $1 billion, and global high-yield dollar bond funds saw a decline of $473 million.
