October 8 (Reuters) – Cash inflows into U.S. bond funds fell in the week to October 6 as a surge in energy prices led to inflationary pressures, with concerns over the cap on US debt capping inflows for 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. Read more
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.
Report by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Paul Simao
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