(Reuters) – U.S. investors remained net sellers of bond funds in the week to April 6 on rising prospects of rapid reductions to the Federal Reserve’s balance sheet alongside steady increases in policy rates.
U.S. investors sold bond funds of $2.24 billion, compared with net withdrawals of $3.86 billion in the previous week, Refinitiv Lipper data showed.
For a related graphic on Fund flows: US equities bonds and money market funds, click https://tmsnrt.rs/38uMgdr
Minutes of the Federal Reserve latest meeting showed this week that officials “generally agreed” in mid-March to cut up to $95 billion a month from the central bank’s asset holdings as a second tool in the fight against surging inflation.
The U.S. Treasury 10-year yield touched a three-year high and the 2 year-10 year spread widened on Thursday.
U.S. investors sold $1.81 billion worth of municipal bond funds and $214 million in taxable funds.
U.S. short/intermediate investment-grade funds witnessed withdrawal of $1.33 billion in a 13th straight week of outflows.
Meanwhile loan participation funds secured $2.22 billion, and high yield funds drew $1.1 billion in a second straight week of inflows.
For a related graphic on Fund flows: US bond funds, click https://tmsnrt.rs/3DQNzPw
Investors also exited U.S. equity funds for a second subsequent week amounting $931 million, although a 38% lower outflow.
U.S. investors discarded value funds worth $2.35 billion in a third straight week of net selling, although growth funds posted inflows of $348 million after a week of net selling.
For a related graphic on Fund flows: US growth and value funds, click https://tmsnrt.rs/3uhTsSO
Among U.S. sector funds, investors offloaded financial funds worth $3.47 billion, marking the biggest outflow since at least May 2020.
U.S. consumer discretionary, industrials and tech funds lost $724 million, $575 million and $262 million respectively in outflows, while metals & mining funds gained $211 million in net buying.
For a related graphic on Fund flows: US equity sector funds, click https://tmsnrt.rs/3xixMrL
Meanwhile, U.S. money market funds faced $29.45 billion worth of net selling after attracting inflows of $30.88 billion in the previous week.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Hugh Lawson)