Global Equity Funds Experience Outflows Amid Tariff Concerns

Global Equity Funds Experience Outflows Amid Tariff Concerns

Global equity funds have recorded their second weekly outflow in seven weeks, totaling $3.86 billion in net sales by February 5, 2025. This shift is attributed to heightened investor caution following U.S. President Donald Trump’s announcement of significant tariffs on imports from Mexico, Canada, and China. Although the tariffs on Mexico and Canada were subsequently postponed, the initial announcement prompted investors to withdraw $10.71 billion from U.S. equity funds. Conversely, Asian and European equity funds saw net inflows of $4.86 billion and $1.88 billion, respectively. Sector-specific global equity funds, particularly in the financial and consumer discretionary sectors, attracted net inflows of $2 billion and $911 million, respectively. Global bond funds remained popular, garnering $17.74 billion in net inflows, marking the sixth consecutive week of positive net investments. Short-term bond funds continued their 18-week streak of net inflows, receiving $4.14 billion. The data underscores a cautious investor sentiment, influenced by ongoing trade policy uncertainties and their potential impact on global economic stability.