Global Equity Funds Face Largest Selloff in Three Months Amid Inflation Fears

Global equity funds witnessed the most significant weekly selloff in three months through March 18th. This occurred as investors sought to cut risk exposure ahead of critical central bank meetings amid concerns over inflation and the economic tensions stemming from the U.S.-Israeli conflict with Iran.

Notably, global investors divested equity funds of a whopping net $20.3 billion, marking their highest weekly net sales since nearly $46.66 billion divestments in December. Despite central banks like the Federal Reserve keeping rates constant, tighter monetary policies seem imminent.

In terms of specific fund flows, U.S. equity funds noted a surge in outflows amounting to a net $24.78 billion, a peak in 2-1/2 months. While European funds faced outflows of $2.13 billion, Asian funds benefited from net inflows of $5.45 billion. Additionally, industrial and technology equity sectoral funds drew substantial investments, attracting $1.83 billion and $1.78 billion, respectively.