US bond funds see money outflows for 10th straight week

U.S. investors exited bond funds for a 10th consecutive week, selling $7.24 billion worth, compared with net selling of $7.8 billion in the previous week, Refinitiv Lipper data showed.

The Fed announced a quarter of a percentage point increase to near-zero U.S. interest rates on Wednesday, and signalled it would hike rates more aggressively than expected to tame soaring inflation, following a firm inflation reading last week.

U.S. taxable bond funds lost $5.18 billion in a second consecutive week of net selling, while municipal bond funds saw a fifth weekly outflow, worth $2.04 billion.

Investors sold U.S. high yield funds to the turn of $1.86 billion and pulled $3.8 billion out of U.S. short/intermediate investment-grade funds, marking a 10th weekly outflow in a row.

However, demand for inflation-protected funds nearly doubled over the previous week, as they gathered $0.81 billion in net purchases.

Meanwhile, investors turned net sellers in U.S. equity funds, offloading funds worth $2.81 billion, compared with purchases of $4.57 billion in the preceding week.

U.S. value funds, however, drew purchases of $1.41 billion after two straight weeks of outflows, but growth funds saw a sixth weekly outflow worth $2.61 billion.

Among sector funds, weekly selling in consumer discretionary funds hit a six-week high of $1.16 billion, while tech and industrials, each saw outflows of about $0.85 billion. Mining funds, however, attracted $1.07 billion worth of purchases.

U.S. money market funds saw a second weekly outflow worth $18.3 billion, although a 32% drop in selling compared with outflows a week ago.