Investors rounded off a bruising year of rising interest rates and high inflation by retreating from equity funds at the fastest pace in more than two decades.New data from EPFR show a net withdrawal of nearly $42bn from global equity funds in the week to Wednesday, with the Federal Reserve’s subsequent warning that borrowing costs are unlikely to fall until 2024 denting what little festive cheer remained.
Analysis of the data by Barclays shows this is the biggest outflow from products including exchange traded funds in the asset class since 2000, and marks only the second example, after the same week last year, of weekly outflows exceeding $40bn, despite the 15 per cent jump in global stocks from mid-October to the start of December.
“Widespread de-risking” before the end of the year suggested investors are “highly sceptical of the recent rally, and seem to have used it as an opportunity to sell”, said Emmanuel Cau, head of European equity strategy at Barclays. Global stocks have fallen by 20 per cent in 2022.