Global Investors Retreat Amid Middle East Tensions
Global investors reduced their equity fund holdings as the U.S.-Israeli conflict with Iran heightened inflation fears, leading to significant outflows. Affected were U.S. equity funds, which saw $21.92 billion in net sales. Safe-haven and bond funds experienced inflows, despite easing trends in emerging markets.
Global investors have pulled back from their equity fund holdings for the first time in eight weeks, amid rising tensions between the U.S. and Israel with Iran, which have fueled inflation concerns.
In the week leading up to March 4, U.S. equity funds suffered net sales of $21.92 billion, marking the largest outflow since January 7. Overall, global equity funds registered net outflows of approximately $1.44 billion, according to data from LSEG Lipper.
The escalation of the Middle East conflict has triggered fears of a potential global oil price shock, negatively impacting equities and increasing apprehensions about inflation and the potential delay of interest-rate reductions. The MSCI World Index has faced its worst week since early April 2025, declining by more than 2.5% over the week.
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