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.
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 (.MIWD00000PUS) is on track for its worst week since early April 2025, registering over 2.5% declines this week.
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.
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 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.
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.
Investors, meanwhile, ditched roughly $2.62 billion worth of gold and precious metals commodity funds in their second weekly net sales in eight weeks.
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.
Fund flows: Global equities, bonds and money markets
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-FLOWS/GLOBAL-FLOWS/xmvjeynzgpr/chart.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1600" height="858" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-FLOWS/GLOBAL-FLOWS/xmvjeynzgpr/chart.png"/>
Fund flows: Global equity sectors
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-FLOWS/GLOBAL-FLOWS/jnvwbraqlpw/chart.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1600" height="922" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-FLOWS/GLOBAL-FLOWS/jnvwbraqlpw/chart.png"/>
Weekly flows into global bond funds
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-MARKETS/zjpqomyxxpx/chart.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1680" height="758" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-MARKETS/zjpqomyxxpx/chart.png"/>
Fund flows: EM equities and bonds
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-FLOWS/GLOBAL-FLOWS/lgvdagorbpo/chart.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1600" height="868" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/GLOBAL-FLOWS/GLOBAL-FLOWS/lgvdagorbpo/chart.png"/>

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- Global investors reduced equity fund holdings for the first time in eight weeks, driven by concerns over the U.S.-Israeli conflict with Iran and inflation fears.  
- U.S. equity funds faced the largest outflows of $21.92 billion, contributing to a total global outflow of approximately $1.44 billion as risk appetite declined.  
- In contrast, safe-haven assets like money market and bond funds saw significant inflows, with $20.22 billion and $16.12 billion respectively, indicating a shift in investor sentiment.

Reuters

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GRAPHIC-Global equity funds post first outflow in eight weeks on Middle East conflict