Global equity funds have seen their first week of outflows in more three months.
According to data provided by LSEG Lipper, global equity funds posted a net outflow of $5.7 billion for the week ended August 26.
This brings to an end a 13-week period of consecutive net inflows.
The biggest drag on fund flows was US equity funds which suffered a massive $22.3 billion of outflows.
Investors have become concerned about the size of the US national debt, which has risen above $40 trillion, and the ongoing war in Iran.
Last week also saw the earnings report from chip maker Nvidia (in which it forecast 70% growth for next year) and the maiden speech from new Federal Reserve chairman Kevin Warsh (in which he signalled there would be no interest rate cut this month and called on the market to not see the statements of Federal Reserve chairman as “forward guidance”).
These two events acted as a trigger for investors that pulled capital from US equity funds as an act of caution.
There were some sectors that bucked the trend. The tech sector saw $3.2 billion in net inflows while European and Asian equity funds attracted $7.92 billion and $4.21 billion of respective inflows.
Meanwhile, global bond funds attracted $10.25 billion in net inflows and gold funds saw $4.21 billion in net inflows. Money market funds, however, shed $19.74 billion.