U.S. bond funds see biggest weekly outflow in four weeks

div classBodysc17zpet90 cdBBJodivpReuters – U.S. bond funds saw a surge in outflows in the week to May 11 on concerns over higher inflation readings, which cemented expectations of aggressive rate hikes by the Federal Reserve.

According to Refinitiv Lipper data, U.S. bond funds faced capital withdrawals for the 18th straight week, amounting to 10.42 billion, nearly twice the 5.9 billion in disposals in the previous week.pdivdivdiv classBodysc17zpet90 cdBBJodiv

GRAPHIC – Fund flows: US equities bonds and money market funds https:fingfx.thomsonreuters.comgfxmktxmvjoyzbbprFund20flows20US20equities20bonds20and20money20market20funds.jpg

The U.S. benchmark 10year Treasury yield hit a 312year high of 3.203 this week on fears over higher inflation levels.

U.S. headline consumer prices rose 8.3 in April yearonyear, beating economists forecasts for 8.1, data showed on Wednesday.

Investors sold U.S. taxable bond funds worth 7.72 billion, about 95 larger withdrawal from a week ago, while municipal funds suffered outflows of 2.76 billion.

U.S. shortintermediate investmentgrade funds witnessed net selling of 7.28 billion in the biggest weekly outflow since April 2020. However, U.S. shortintermediate government & treasury funds lured inflows of 2.62 billion.

ppGRAPHIC: U.S. bond funds https:fingfx.thomsonreuters.comgfxmktznpnemylovlFund20flows20US20bond20funds.jpg

Meanwhile, investors offloaded U.S. equity funds worth 8.46 billion in a fifth straight weekly outflow.

GRAPHIC: U.S. growth and value funds https:fingfx.thomsonreuters.comgfxmktmovanoxwbpaFund20flows20US20growth20and20value20funds.jpg

Selling continued in U.S. growth funds for the seventh straight week, amounting to 4.5 billion. Value funds also posted an outflow, worth 1.99 billion, after a weeks inflow.

Among sector funds, financials, industrials, materials, and tech lost 1.24 billion, 756 million, 677 million, and 468 million, respectively, in outflows.

GRAPHIC: U.S. equity sector funds https:fingfx.thomsonreuters.comgfxmktgkvlgkrbapbFund20flows20US20equity20sector20funds.jpg

Meanwhile, U.S. money market funds booked net selling of about 7 billion in their first weekly outflow in three weeks.

Reporting by Gaurav Dogra and Patturaja Murugaboopathyin Bengaluru Editing by Kim Coghillp

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