US bond funds see biggest weekly outflow in eight weeks

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People walk at the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., August 9, 2021. REUTERS/Andrew Kelly/File Photo

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Aug 26 (Reuters) – Investors dumped U.S. bond funds in the week to Aug. 24 as they waited to hear a speech from Federal Reserve Chairman Jerome Powell later on Friday, which will be considered at the looking for clues on the pace of upcoming interest rate hikes. Read more

According to data from Refinitiv Lipper, U.S. bond funds saw outflows worth $8.81 billion, the most in a week since June 22.

Fund flows: US stocks, bonds and money market funds

U.S. yields across the curve, from two-year to 30-year bonds, hit highs last seen five to 10 weeks ago as market participants positioned themselves for hawkish comments from Powell.

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Investors exited U.S. taxable bond funds with a net worth of $7.67 billion, the highest amount in nine weeks, while municipal bond funds saw net outflows of 1.36 billion dollars.

U.S. high-yield funds also suffered net sales of $4.72 billion, the largest outflow in more than two months, while broad domestic taxable fixed income and short-term government and treasury funds /intermediate recorded net outflows of $1.7 billion and $883 million respectively.

Fund flows: US bond funds

However, safer money market funds attracted their biggest weekly net inflow since July 6 at $11.07 billion.

US equity funds were also not in vogue, posting a weekly net outflow of $2.19 billion after two weeks of net buying.

Investors sold US growth funds with a net worth of $3.31 billion in their biggest weekly sale since July 20, while exiting $1.75 billion of value funds.

Fund flows: US growth and value funds

Technology and industrials recorded net outflows of $1.77 billion and $723 million, respectively, although financials attracted $1.87 billion in net purchases.

Fund flows: U.S. equity sector funds

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Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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