(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.
For a related chart on fund flows: US stocks, bonds and money market funds, click https://tmsnrt.rs/38uMgdr
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.
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.
For a related chart on Fund Flows: US Bond Funds, click https://tmsnrt.rs/3DQNzPw
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.
For a related chart on Fund Flows: US Growth and Value Funds, click https://tmsnrt.rs/3uhTsSO
Among U.S. sector funds, investors unloaded financial funds worth $3.47 billion, marking the biggest 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.
For a related chart on Fund Flows: US Equity Sector Funds, click https://tmsnrt.rs/3xixMrL
Meanwhile, U.S. money market funds faced $29.45 billion in net sales after attracting inflows of $30.88 billion the previous week.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Hugh Lawson)
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