U.S. bond funds see lowest weekly inflow in 2-1/2 months on inflation fears, Lipper says

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Oct 8 (Businesshala) – Money flows into U.S. bond funds fell in the week to Oct 6 as rising energy prices added to inflationary pressures, with concerns about U.S. debt ceiling capping inflows.

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Data from Lipper showed investors bought a net $727 million in US bond funds in the week to October 6, their lowest weekly inflow since July 21.

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Yields on short-term bonds climbed during the week on fears that the US Treasury could run out of cash, potentially leading to an increase in debt limits or default without suspension.

However, the US Senate on Thursday approved legislation to temporarily raise the federal government’s $28.4 trillion debt limit and avoid the risk of a historic default this month.

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Fund flows into US equity bond and money market funds

US government bond funds saw a second straight week of outflows worth $483 million, while municipal debt funds attracted $988 million in net purchases.

Inflation-protected bond funds also received $1.28 billion, the most inflows since late July.

US bond flows into the fund

After two consecutive weeks of outflows, US equity funds received an inflow of $2.85 billion.

Investors bought $1.17 billion in equity value funds after two consecutive weeks of selling, while growth funds faced outflows worth $882 million for the third week in a row.

Among sector funds, technology and financials attracted $785 million and $502 million, respectively, while healthcare funds marked the second outflow of $1.93 billion.

Flows into US Equity Sector Funds

Fund flows to US Growth and Value Fund

Meanwhile, US money market funds suffered the first net sale in three weeks, bringing in a net $14.03 billion.

Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Paul Simao


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