U.S. bond funds attract inflows for second straight week

U.S. bond funds attract inflows for second straight week

(Reuters) – U.S. bond funds attracted money inflows for a second straight week in the seven days to Jan. 18, buoyed by expectations that the Federal Reserve will slow the pace of its rate hikes to avert a sharp economic slowdown.

Refinitiv Lipper data showed U.S. bond funds had another strong week of buying from investors as they obtained a net $5.83 billion worth of inflows.

The benchmark 10-year U.S. Treasury yield hit a four-month low of 3.368% this week on signs of slowing inflation after data last week showed consumer prices dropped for the first time in more than 2-1/2 years.

Investors bought U.S. taxable bond funds worth $4.57 billion and municipal bond funds worth $1.28 billion.

They purchased emerging markets debt and mortgage debt funds worth about $1.5 billion each.

Meanwhile, U.S. equity funds recorded a ninth successive week of net selling, with investors exiting a net $3.13 billion worth of funds.

Investors jettisoned $4.03 billion worth of U.S. growth funds in a ninth consecutive week of net selling, while shunning off $670 billion worth of value funds.

However, some sectoral funds observed investor demand, with consumer discretionary, metals & mining, and communication services drawing $289 million, $269 million and $123 million worth of inflows.

Investors also withdrew $10.99 billion out of money market funds, posting a second weekly net selling in a row.