(Reuters) – U.S. bond funds posted large outflows in the week to March 9 on investor fears that surging oil prices would push up already-high U.S. inflation.
U.S. investors pulled a net $7.8 billion out of bond funds, marking the biggest weekly outflow in three weeks and the seventh successive week of selling.
Graphic: Fund flows: US equities bonds and money market funds: https://fingfx.thomsonreuters.com/gfx/mkt/akpezxlelvr/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg
The WTI crude oil surged to about a 14-year high earlier this week. U.S. President Joe Biden’s announcement of a ban on Russian oil and energy imports on Tuesday raised further concerns over surging crude oil prices.
However, crude oil prices eased later in the week after the United Arab Emirates pledged to boost its oil supply and it became clear the European Union would not join the United States and Britain in banning Russian oil.[O/R]
U.S. taxable bond funds lost $6.5 billion in the biggest weekly net selling in three weeks, while municipal bond funds lost $909 million in a fourth weekly outflow.
Investors sold U.S. general domestic taxable fixed income funds to the tune of $2.66 billion, while U.S. short/intermediate investment-grade funds faced net selling for the ninth subsequent week, worth $4.16 billion.
Meanwhile, inflation-protected funds secured $430 million in net buying, the biggest weekly inflow since Jan. 19.
Graphic: Fund flows: US bond funds: https://fingfx.thomsonreuters.com/gfx/mkt/lgpdwabjdvo/Fund%20flows%20US%20bond%20funds.jpg
Investors purchased U.S. equity funds worth $4.49 billion after two consecutive weeks of net selling.
US large-, and small-cap funds drew inflows of $5.6 billion and $2.97 billion respectively, after facing an outflow in the previous week, although mid-cap funds saw a fourth straight week of outflow, worth $490 million.
U.S. growth and value-oriented equity funds both witnessed outflows, of $2.16 billion and $1.03 billion respectively.
Graphic: Fund flows: US growth and value funds: https://fingfx.thomsonreuters.com/gfx/mkt/lbpgnzxjavq/Fund%20flows%20US%20growth%20and%20value%20funds.jpg
Among sector funds, financials, and real estate had outflows of $1.92 billion and $707 million respectively, while mining funds secured inflows of $812 million.
Graphic: Fund flows: US equity sector funds: https://fingfx.thomsonreuters.com/gfx/mkt/byprjeamwpe/Fund%20flows%20US%20equity%20sector%20funds.jpg
Meanwhile, investors sold U.S. money market funds of $26.9 billion after two straight weeks of net buying.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Hugh Lawson)
