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U.S. bond funds see money outflows for 10th straight week -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: This illustration, taken on February 14, 2022 shows U.S. Dollar banknotes. REUTERS/Dado Ruvic/Illustration

(Reuters) – U.S. bond fund outflows were large in the week ending March 16. This strong indicator of U.S. inflation has led to expectations that the Federal Reserve would need to quickly tighten its policy to curb rising prices.

Refinitiv Lipper data revealed that U.S. bond fund investors sold $7.24 Billion worth of bonds for the 10th consecutive week. This is compared to net sales of $7.8 Billion in week prior.

Graphic: Fund flows: U.S. equities, bonds and money market funds https://fingfx.thomsonreuters.com/gfx/mkt/lgvdwargapo/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg

After a week of firm inflation data, the Fed has announced that the Fed will increase interest rates to near zero on Wednesday by quarter percent.

The U.S. Treasury Bond Funds lost $5.18B in the second week consecutively, while municipal bonds funds experienced a fifth weekly outflow of $2.04B.

U.S. High Yield Funds were purchased by investors at $1.86 Billion. $3.8 Billion was taken from U.S. Short/Intermediate Investment-Grade funds. It marked the 10th weekly outflow.

Graphic:Fund flows: U.S. bond funds https://fingfx.thomsonreuters.com/gfx/mkt/mypmnxdyevr/Fund%20flows%20US%20bond%20funds.jpg

The demand for inflation-protected money nearly doubled in the week before, with net sales of $0.81 billion.

Investors became net sellers of U.S. equity fund funds and sold funds for $2.81 Billion, as compared to $4.57 Billion in purchases the week before.

U.S. Value funds however made purchases in the amount of $1.41billion after two weeks of outflows. Growth funds received a $6 billion weekly outflow.

Graphic: Fund flows: US growth and value funds: https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkoxmlpx/Fund%20flows%20US%20growth%20and%20value%20funds.jpg

Sector funds saw a peak in weekly sales of consumer discretionary funds at $1.16 Billion. Tech and industrials had outflows around $0.85 Billion. However, mining funds attracted $1.07 trillion worth of purchases.

Graphic: Fund flows: US equity sector funds: https://fingfx.thomsonreuters.com/gfx/mkt/klpykbxllpg/Fund%20flows%20US%20equity%20sector%20funds.jpg

U.S. Money Market Funds saw another weekly outflow, this time $18.3B. However, there was a 32% decline in selling when compared to a week earlier.

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