US bond funds record outflows for 17th week in a row

US bond funds record outflows for 17th week in a row

U.S. investors remained net sellers of bond funds in the week to May 4 as the economy’s rising inflationary challenges fanned caution ahead of the Federal Reserve’s policy meeting this week.

According to Refinitiv Lipper data, U.S. investors offloaded $5.52 billion worth of bond funds in a 17th straight week of net selling.The U.S. benchmark 10-year Treasury yield hit nearly a 3-1/2-year high of 3% this week after reports last week showed rising U.S. consumer spending in March and surging labour costs in the first quarter.

U.S. short/intermediate investment-grade funds witnessed net selling of $5.46 billion in a 17th straight week of outflows. Loan participation funds, however, obtained inflows of $0.83 billion, the largest amount in three weeks.

Meanwhile, U.S. equity funds’ weekly outflows eased to a four-week low of $3.76 billion.U.S. value funds posted their first weekly inflow in seven weeks, worth $854 million, while growth funds saw net selling of $3.93 billion, although that was the lowest outflow in four weeks.

Among sector funds, tech and financials lost $724 million and $593 million, respectively, in net selling, while utilities saw net buying of $542 million.U.S. money markets drew net purchases of $2.63 billion, although there was a 94% drop in inflows compared with the previous week.