U.S. bond funds see biggest weekly inflow in nine weeks – Lipper
U.S. bond funds saw massive inflows in the week to Nov. 3 as investors reassessed expectations of quicker interest rate hikes ahead of the Federal Reserve’s policy meeting, after short-term Treasury yields surged to multi-month peaks.
According to Lipper data, U.S. bond funds attracted $8.1 billion in net purchases, which were the largest inflows since the week to Sept. 1.
The U.S. central bank on Wednesday announced the tapering of its monthly $120 billion purchases in debt securities by $15 billion a month and restated that current high inflation is “expected to be transitory.” Meanwhile the Fed Chair Jerome Powell indicated that more job growth was needed before the central bank raised interest rates.
The U.S. 2-year Treasury yield dipped more than 10 basis points since hitting a 19-month peak last week.
“The tightening bar was set too high for the Fed,” Mizuho Bank said in a note to clients.
U.S. taxable bond funds drew a net $5.98 billion in inflows while U.S. municipal bond funds saw $1.61 billion worth of net buying.
U.S. short/intermediate investment-grade funds lured a net $2.12 billion after facing outflows in the previous week, while inflation protected funds and mortgage funds both attracted over $1.5 billion in inflows.
Meanwhile, demand for U.S. equity funds dropped as they received just $167 million, their smallest inflow in five weeks.
Data showed large- and mid-cap equity funds saw outflows of $1.16 billion and $0.37 billion respectively, although small-cap funds received small inflows.
U.S. equity value funds saw outflows for a third straight week worth $1.93 billion, and growth funds saw net selling of $1.57 billion.
Among sector funds, healthcare, technology and real estate funds gained inflows of $986 million, $840 million, and $701 million respectively, while consumer discretionary funds witnessed outflows of $462 million.
Meanwhile, U.S. money market funds faced net selling of $5.6 billion, compared with $42.3 billion worth of net buying in the previous week.
Source: Reuters (Reporting by Gaurav Dogra in Bengaluru; Editing by Andrea Ricci)