US bond funds post outflows for 13th consecutive week

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 29, 2022. REUTERS/Brendan McDermid

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April 8 (Reuters) – U.S. investors remained net sellers of bond funds in the week to April 6 on growing prospects for rapid reductions in the Federal Reserve’s balance sheet alongside steady increases in policy rates.

U.S. investors sold $2.24 billion in bond funds, compared with net outflows of $3.86 billion the previous week, according to data from Refinitiv Lipper.

Fund flows: US stocks, bonds and money market funds

Minutes from the Federal Reserve’s last meeting this week showed officials “broadly agreed” in mid-March to cut up to $95 billion a month from central bank assets as a second tool in the fight against soaring inflation. Read more

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The 10-year US Treasury yield hit a three-year high and the 2-10-year spread widened on Thursday.

US investors sold $1.81 billion worth of municipal bond funds and $214 million worth of taxable funds.

U.S. high-quality short/intermediate funds saw a $1.33 billion drawdown in a 13th consecutive week of outflows.

Meanwhile, loan participation funds secured $2.22 billion and high-yield funds attracted $1.1 billion in a second consecutive week of inflows.

Fund flows: US bond funds

Investors also exited US equity funds for a second week in a row for $931 million, albeit a 38% lower outflow.

U.S. investors dumped value funds worth $2.35 billion in a third straight week of net sales, though growth funds saw inflows of $348 million after a week net sales.

Fund flows: US growth and value funds

Among U.S. sector funds, investors unloaded financial funds worth $3.47 billion, marking the largest outflow since at least May 2020.

U.S. consumer discretionary, industrials and technology funds lost $724 million, $575 million and $262 million in outflows, respectively, while metals and mining funds gained $211 million in net purchases.

Fund flow: U.S. equity sector funds

Meanwhile, U.S. money market funds faced $29.45 billion in net sales after attracting inflows of $30.88 billion the previous week.

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Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Hugh Lawson

Our standards: The Thomson Reuters Trust Principles.

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