Trump's tariff threat intensifies risk aversion, global stock funds "bleed"

As of February 5th, global stock funds experienced their second weekly outflow in seven weeks, as a result of US President Trump's announcement of tariffs on Mexico, Canada, and China, causing investors to become more cautious. However, the selling pressure eased after Trump postponed imposing tariffs on Canada and Mexico. According to data compiled by LSEG Lipper, investors this week net sold $3.86 billion from global stock funds, compared to net buying of $15.35 billion the previous week. Global stock, bond, and currency market fund flows: Investors withdrew a net of $10.71 billion from US stock funds, but allocated a net of $4.86 billion and $1.88 billion to Asian funds and European funds respectively. At the same time, global sector funds attracted around $2.9 billion in net inflows, marking the fifth consecutive week of inflows. Financial and non-essential consumer goods sectors both saw inflows for the fourth straight week, reaching $2 billion and $911 million respectively. Global bond funds continued to gain favor with investors for the sixth consecutive week, with strong net inflows of $17.74 billion for the week. Short-term bond funds maintained strong demand for the 18th consecutive week, with investors injecting $4.14 billion into these funds. Loan participation funds and high-yield bond funds also attracted net inflows of $3.03 billion and $1.62 billion respectively. Investors also snapped up a total of $75.4 billion in money market funds, compared to net selling of $40.64 billion the previous week. In commodity funds, precious metal funds saw a net outflow of $563 million for the third consecutive week, while energy funds saw a net inflow of $1 billion. Data covering 29,598 emerging market funds shows that investors have been selling stock funds for the 13th consecutive week, with a total withdrawal of $600 million. However, investors have been buying bond funds for the fifth consecutive week, with an amount of $1.85 billion.