Global Navigator | Fund groups feeling the pinch from higher energy prices and interest rates

The penultimate week of 3Q26 was marked by rising short and long-term US interest rates, oil prices holding around the $100 a barrel and diesel prices hitting record highs, the third quadruple witching options settlement date and an unexpectedly strong US GDP report which reinforced concerns that the Fed and other major central banks are already behind curve when it comes to inflation.

Against this uncomfortable backdrop, EPFR-tracked Equity Funds posted their first collective outflow in three months while redemptions from Leveraged Equity Funds climbed to a 22-week high and Bear Funds tallied their biggest inflow since mid-April. Physical Gold and Inflation Protected Bond Funds recorded their 12th and 34th consecutive inflows, respectively, and Cryptocurrency Funds took in fresh money for the eighth time during the past 10 weeks.

Preliminary flow data for the first 12 weeks of the current quarter still show strong investor appetite for US exposure, with US Equity and Bond Funds absorbing a combined $261 billion, and a clutch of diversified fund groups in the top 20 by cash flows. In relative terms, nearly a third of the groups ranked in the top 20 are emerging markets liquidity funds and Ultra Long Bond Funds make an appearance.