(Reuters) – U.S. equity funds saw net purchases in the week ended Dec. 14, as slowing inflation rates raised expectations that the Federal Reserve would cut back the pace of its interest rate hikes.
According to Refinitiv Lipper data, investors bought a net $3.9 billion worth of U.S. equity funds, marking their first weekly net buying since Nov. 16.
Graphic: Fund flows: US equities bonds and money market funds, https://fingfx.thomsonreuters.com/gfx/mkt/klpyggqmbpg/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg Financial sector funds obtained $521 billion worth of inflows after three straight weeks of outflows. Consumer staples and utilities sector funds also saw net purchases of $256 million and $236 million, respectively, while outflows from the tech sector eased to a four-week low of $92 million.
However, the U.S. Federal Reserve announced a half a percentage point interest rate increase on Wednesday and projected more rate hikes next year.
Graphic: Fund flows: US equity sector funds, https://fingfx.thomsonreuters.com/gfx/mkt/dwvkddkjqpm/Fund%20flows%20US%20equity%20sector%20funds.jpg Meanwhile, U.S. bond funds continued to record outflows for a sixth week, with disposals amounting to a net $3.75 billion.
Investors withdrew $2.1 billion from US taxable bond funds, while net selling in U.S. municipal bond funds jumped to a five- week high of $963 million.
Loan participation, inflation-protected, and short/intermediate investment-grade funds lost $1.21 billion, $878 million and $334 million in outflows. Still, government bond funds gained a net $1.92 billion in a sixth successive week of inflow.
Graphic: Fund flows: US bond funds, https://fingfx.thomsonreuters.com/gfx/mkt/zjpqjjnamvx/Fund%20flows%20US%20bond%20funds.jpg
Meanwhile, money market funds drew a net $15.88 billion as inflows continued for the fourth week in a row.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru)