THE Barclays said on Wednesday that global mutual funds could sell an additional $350 billion worth of shares this year unless recession fears subside, given the uncertain macroeconomic backdrop and tightening market conditions. policy monetary.
According to Barclays, equity outflows averaged 2.6% of assets under management in mutual funds in previous periods of large sell-off, such as the 2008 financial crisis.
This year, the percentage is 0.3%, which suggests that another 350 billion dollars in sales of shares are set to happen in 2022 unless recession fears subside.
Mutual funds have been net sellers of equities this month for the first time since August 2020, although equity outflows are small compared with a record inflow of $1.3 trillion since 2020, Barclays said.
Macroeconomic and earnings per share revision trends “turned negative, which suggests that the direction is leaning towards more (equity) outflows, although the magnitude is unclear at this stage,” the bank added.
Barclays believes that the consumption outlook is unlikely to improve if the Federal ReserveThe central bank From U.Sbecome more aggressive on monetary policy, although income and business fundamentals look favorable for now.
Barclays continues to see the US more vulnerable to higher equity sales than the European Unionas the stocks have higher valuations.
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