GRAPHIC-US bond funds record smallest weekly inflow in 2.5 months due to inflation fears, according to Lipper



October 8 (Reuters)Cash inflows into U.S. bond funds plummeted in the week to October 6, as surging energy prices led to inflationary pressures, with concerns about the U.S. debt ceiling capping inflows. ‘shorter-term bonds.

Investors bought $ 727 million net of U.S. bond funds in the week to October 6, their smallest weekly inflow since July 21, according to Lipper data.

Yields on shorter-term bonds climbed over the week amid fears that the US Treasury might be strapped for cash, which could lead to a default without an increase or suspension of the debt ceiling.

However, the U.S. Senate on Thursday approved legislation to temporarily raise the federal government’s debt limit to $ 28.4 trillion and avoid the risk of a historic default this month.

U.S. government bond funds saw a second straight week of outflows, worth $ 483 million, while municipal debt funds attracted $ 988 million in net purchases.

Inflation-protected bond funds also received $ 1.28 billion, the highest inflow since late July.

US equity funds received inflows of $ 2.85 billion, after two consecutive weeks of outflows.

Investors bought $ 1.17 billion worth of value equity funds after two straight weeks of selling, while growth funds faced cash outflows for the third consecutive week, worth $ 882 million.

Among sector funds, technology and financials drew $ 785 million and $ 502 million, respectively, while health funds marked a second consecutive outflow worth $ 1.93 billion.

Meanwhile, US money market funds faced the first net sale in three weeks, for a net amount of $ 14.03 billion.

Cash flow to U.S. equity bonds and money market funds

Flows in US bond funds

Flows in US Equity Sector Funds

Funds flowing to US growth and value funds

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by Paul Simao)

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