Global money market funds’ weekly inflows hit 3-year high

(Reuters) – Global money market and government bond funds received massive inflows in the seven days to March 22 as investors scrambled for safety amid turmoil in the U.S. and European banking sectors, which has revived memories of the 2008 financial crisis.

Global money market funds drew a net $120.72 billion in inflows, the most in a week since April 2020. Government bond funds attracted a net $10.15 billion after witnessing $8.24 billion of net purchases in the previous week.

GRAPHIC-Fund flows: Global equities, bonds and money market

The collapse of Silicon Valley Bank and Signature Bank and the eleventh-hour rescue of Credit Suisse this month has fuelled investor concerns that the U.S. economy could head into another prolonged recession.

Meanwhile, global equity funds received their first weekly inflow in six weeks, amounting a net $13.37 billion.

Investors purchased U.S. and Asian equity funds worth $10.19 billion and $3.6 billion, respectively, while Europe witnessed outflows of $2.15 billion.

By sector, consumer staples and tech saw $553 million and $458 million worth of net buying, while investors pulled out $405 million from metals and mining.

GRAPHIC-Fund flows: Global equity sector funds

Global bond funds drew $534 million in inflows after outflows of $4.65 billion in the previous week.

Still, short- and medium-term, and high-yield bond funds recorded net selling of $3.48 billion and $3.23 billion, respectively.

GRAPHIC-Global bond fund flows in the week ended March 22

Among commodities, investors purchased $310 million worth of precious metal funds, marking their biggest weekly net buying in eight weeks. Energy funds also obtained $213 million in net inflows.

Data for 23,899 emerging market funds showed equity and bond funds booked outflows for a second straight week, losing a net $259 million and $1.8 billion, respectively.

GRAPHIC-Fund flows: EM equities and bonds

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Vinay Dwivedi)