Global equity funds post largest outflows in nine months

Investors pulled $23.21 billion from global equity funds in the week through September 16, the largest weekly outflow since December 2025, as surging oil prices and the Federal Reserve's latest interest rate hike fueled a broad retreat from risk assets, according to LSEG Lipper data reported by Reuters.reuters

The Fed raised rates by 25 basis points on Wednesday, signaling that further increases may be needed to curb inflation driven by higher energy costs linked to the conflict in Iran. Crude oil climbed to four-month highs during the week, pushing Treasury yields higher and weighing heavily on growth-oriented funds.reuters

Flight From US Equities

US equity funds bore the brunt of the selling, with investors withdrawing a net $31.44 billion in a fourth consecutive week of outflows. European equity funds saw modest outflows of $295 million, while Asian funds bucked the trend with $6.26 billion in net inflows. Emerging market equity funds recorded a second straight week of outflows totaling $1.61 billion.reuters

The weekly data echoed broader monthly trends identified by Morningstar, which reported that long-term US funds still gathered $100 billion in August inflows but noted a sharp pivot toward inflation-hedging strategies. Short government funds posted their best month since March 2020, while commodities funds took in $11 billion, their second-largest monthly haul on record.morningstar

Safe Havens and Inflation Hedges

Gold and precious metals funds attracted $1.17 billion during the week, their ninth inflow in the past 10 weeks. Investors also favored government bonds and short-term debt, adding $2.96 billion and $1.96 billion respectively, even as global bond fund inflows slowed to just $855 million — the weakest since April. High-yield bond funds lost $3.85 billion as risk appetite waned.reuters

Among equity sectors, technology, financials, and consumer discretionary funds drew a combined $3.87 billion, pushing sector fund inflows to a six-week high.reuters

Markets Stabilize as Oil Retreats

By Thursday, Wall Street staged a rebound as oil prices fell, easing some inflation anxiety. The S&P 500 and Nasdaq Composite both rose, with the tech-heavy index gaining roughly 1.7%. Oil declined for a third straight session on Friday amid hopes that Saudi Arabia could partially restore flows through a key pipeline damaged in drone attacks, according to Bloomberg News.seekingalpha+1

Deutsche Bank ↘ 4.50% analysts noted the globally synchronized tightening cycle, with the European Central Bank having hiked rates the prior week and the Bank of Japan lifting rates to a 31-year high on Friday. President Trump, meanwhile, told Axios he was nearing a decision on whether to resume large-scale military action against Iran, keeping geopolitical risk elevated ahead of next week's United Nations General Assembly meetings.investing