March 6 (Reuters) - Global investors trimmed their equity fund holdings for the first time in eight weeks in the seven days to March 4 as an intensifying U.S.-Israeli conflict with Iran fanned
Global Equity Funds Post First Eight-Week Outflow Amid Middle East Tensions
Market Reactions and Fund Flows Overview
Equity Fund Outflows Driven by Geopolitical Tensions
March 6 (Reuters) - Global investors trimmed their equity fund holdings for the first time in eight weeks in the seven days to March 4 as an intensifying U.S.-Israeli conflict with Iran fanned inflation worries and dampened risk appetite.
U.S. equity funds were the hardest hit, with net sales of $21.92 billion, the biggest outflow since January 7, leading global equity funds to post net outflows of roughly $1.44 billion, LSEG Lipper data showed.
Impact of Middle East Conflict on Global Markets
The widening Middle East conflict raised fears of a global oil price shock, weighing on equities and heightening concerns about inflation and a potential delay in interest-rate cuts.
The MSCI World Index is on track for its worst week since early April 2025, registering over 2.5% declines this week.
Regional and Sector Fund Performance
Regional Equity Fund Flows
Meanwhile, inflows into European equity funds eased to $8.8 billion from about $11.88 billion the previous week, while Asian funds attracted a net $7.43 billion.
Sector-Specific Trends
Among sector funds, industrials and energy drew net inflows of $2.53 billion and $1.21 billion respectively, while financial sector funds saw roughly $1.9 billion in outflows.
Safe-Haven and Bond Fund Movements
Money Market and Bond Fund Inflows
Safe-haven demand lifted net inflows into money market funds to $20.22 billion, broadly in line with the previous week's inflows.
Investors also pumped $16.12 billion into global bond funds for a ninth successive weekly net purchase.
Short-Term and Corporate Bond Fund Trends
Inflows in short-term bond funds surged to $3.62 billion from approximately $1.23 billion a week ago. Euro-denominated bond funds and corporate bond funds also saw significant $2.31 billion and $2.09 billion net inflows.
Commodities and Emerging Markets Overview
Commodity Fund Outflows
Investors, meanwhile, ditched roughly $2.62 billion worth of gold and precious metals commodity funds in their second weekly net sales in eight weeks.
Emerging Markets Fund Activity
In emerging markets, equity funds saw a cooling in inflows to an eight-week low of $5.3 billion. Net purchases in bond funds also eased to $2.5 billion from roughly $3.04 billion recorded the previous week, data for a combined 28,803 funds showed.
(Reporting by Gaurav Dogra; editing by Philippa Fletcher)
