According to Calastone, last month’s record-breaking capital outflow from stock and share investment funds was caused by global market volatility, says Andrew Michael. According to the global fund’s network, equities funds lost £2.4 billion in September, marking the 16th month running that investment portfolios have lost money.
The most recent number broke the prior record, which had been established a month earlier, by more than a fifth. According to Calastone’s Fund Flow Index, equities funds have lost a net amount of slightly over £6.6 billion since the start of 2022. With £4.7 billion more money left the industry in the third quarter of this year than in all of 2016, which had previously been the worst year for outflows in Calastone’s eight-year reporting period.
“The spike in global bond rates is causing a huge repricing of assets of all types,” said Edward Glyn, head of global markets at Calastone. Investors in the UK are leaving the market and voting with their feet. The huge growth stocks that make up the US market are sensitive to market interest rates, which accounts for the record outflows there.
The index shows that during September, US equity funds lost a net of £497 million in the capital. In the same month, Calastone attributed the record net withdrawals of $116 million and $223 million, respectively, from emerging market and Asia-Pacific funds to the strength of the US currency and the decline in China’s economy.
The support that high metal prices earlier in the year gave for developing economies has been knocked away by the possibility of a global recession. In its stead, the damaging impacts of a strong dollar on several developing market economies are becoming more evident. However, the protracted business drama can still have one more turn. To sell the debt to institutional investors, a few Wall Street banks agreed to commit $12.5 billion in funding for the deal. Given the recent increase in corporate debt yields, this may be a more difficult proposition due to rising interest rates and recessionary risks. Twitter stated in a tweet that it had received the letter that the Musk parties had sent to the SEC. The Company intends to consummate the deal at $54.20 per share.
