Global investors moderated their investments in equity funds for the week ending June 24, channeling a reduced amount of new capital into the asset class. The slowdown occurred as the U.S. Federal Reserve adjusted its economic projections and the technology sector experienced a market downturn, according to data from financial information provider Refinitiv Lipper.
For the period, global equity funds attracted $4.6 billion in net inflows. This figure represents a notable decrease from the $22.1 billion of inflows recorded in the prior week.
The geographical distribution of these funds varied. U.S. equity funds experienced net outflows of $3.5 billion, marking the first week of withdrawals in five weeks. In contrast, European equity funds received $5.4 billion in inflows, while Asian equity funds saw outflows of $1.8 billion.
Within the equity sector, investments shifted based on industry. Technology sector funds reported outflows of $513 million, their first weekly outflow since December. Meanwhile, funds focused on financials and healthcare attracted inflows of $1.5 billion and $500 million, respectively.
The change in investment patterns followed the U.S. Federal Reserve’s policy meeting on June 16. During the meeting, officials signaled the possibility of interest rate increases occurring sooner than previously anticipated. The projections released by the Federal Open Market Committee indicated that some members expect rate hikes as early as 2023.
In a related development, other asset classes saw increased investment. Global bond funds recorded inflows of $10.4 billion, a slight increase from the previous week. Government bond funds, in particular, attracted $4.2 billion, the largest amount in five weeks.
Money market funds, which are generally considered a lower-risk asset for holding cash equivalents, also saw substantial inflows totaling $44.7 billion globally.
Year-to-date figures from Refinitiv Lipper show that global equity funds have accumulated a total of $580 billion in inflows, while bond funds have attracted approximately $463 billion during the same period.
