Global equity funds suffer seventh straight week of outflows

(Reuters) – Global equity funds saw a seventh straight week of outflows in the seven days to May 31 on global economic slowdown concerns after weaker readings from China and major European countries.

Investors disposed of a net $4.55 billion of global equity funds during the week, Refinitiv Lipper data showed, compared with a weekly withdrawal of about $3.54 billion a week ago.

Data showing a recession in Germany in the first quarter and contracting factory activity in China in May hit appetite for risk assets. European shares were hit hard as the pan-European STOXX 600 index dropped to a two-month low last week.

European equity funds saw $3.4 billion worth of net selling, while Asian funds had withdrawals of $820 million with China losing a net $425 million in a third straight week of outflows.

Meanwhile, U.S. equity drew $1.22 billion in net purchases, marking their first weekly inflow in 10 weeks.

By sector, investors sold global consumer discretionary, healthcare and financial sector funds of $727 million, $451 million and $418 million respectively. Technology had inflows of $1.08 billion in a fourth straight week of net buying.

Meanwhile, government bond funds and money market funds received $2.37 billion and $16.61 billion worth of inflows respectively, amid the risk-averse tone in the markets.

During the week, combined inflows into global bond funds were a net $4.04 billion in an eleventh straight week of net purchases.

Among commodity funds, energy funds received $143 million in their first weekly inflow in three weeks, but precious metal funds saw $226 million worth of outflows during the week.

Data for 23,954 emerging market funds showed investors sold a net $454 million worth of equity funds, while withdrawing $355 million from bond funds in a sixth successive week of net selling.