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 the escalating U.S.-Israel conflict with Iran raised inflation concerns and dampened risk appetite.
U.S. equity funds were the hardest hit, with net sales of $21.92 billion, the biggest outflow since Jan. 7, leading global equity funds to post net outflows of about $1.44 billion, LSEG Leaper data showed.
The escalating Middle East conflict raised fears of a shock to global oil prices, weighing on concerns about inflation and a possible delay in interest rate cuts.
MSCI’s global index is on track for its worst week since the start of April 2025, recording a decline of more than 2.5% this week.
Meanwhile, inflows to European mutual funds fell to $8.8 billion from last week’s roughly $11.88 billion, while Asian funds attracted a net $7.43 billion.
Among sector funds, industrials and energy accumulated net inflows of $2.53 billion and $1.21 billion, respectively, while financial sector funds had outflows of nearly $1.9 billion.
Safe-haven demand boosted net inflows to money market funds to $20.22 billion, broadly in line with last week’s inflows.
Investors also pumped $16.12 billion into global bond funds for the ninth straight week of net buying.
Flows into short-term bond funds rose to $3.62 billion from nearly $1.23 billion a week ago. Euro-denominated bond funds and corporate bond funds also saw significant net inflows of $2.31 billion and $2.09 billion, respectively.
Meanwhile, investors bought nearly $2.62 billion in gold and precious metals commodity funds in their second weekly net selloff in eight weeks.
In emerging markets, equity funds fell to an 8-week low of $5.3 billion. Net buying in bond funds also fell to $2.5 billion from about $3.04 billion recorded the previous week, data from a combined 28,803 funds showed.
(Reporting by Gaurav Dogra; Editing by Philippa Fletcher)
