U.S. equity funds post biggest weekly outflow in more than 4 months

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People walk by the New York Stock Exchange (NYSE) in Manhattan, New York City

(Reuters) – U.S. equity funds faced big outflows in the week to April 20 as concerns over economic growth, rising yields and prospects of aggressive monetary policy steps to stem inflation fanned risk-off sentiment.

According to Refinitiv Lipper data, U.S. equity funds saw a net outflow of $16.57 billion, marking the biggest weekly outflow since Dec. 15.

GRAPHIC: Fund flows: US equities bonds and money market funds – https://fingfx.thomsonreuters.com/gfx/mkt/zgpomlrzrpd/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg

Concerns over a surge in real yields hit growth stocks in the reported week. Yields on 10-year Treasury Inflation-Protected Securities (TIPS) briefly turned positive this week for the first time since March 2020.

A big drop in subscribers for streaming giant Netflix also weighed on sentiment, hitting demand for growth and tech-related funds.

U.S. investors sold a net $17.06 billion of large-cap funds, marking their biggest outflow since August 2019. Small- and mid-cap funds saw net outflows of $1.11 billion and $0.96 billion, respectively.

Data for growth funds showed weekly heavy selling continued for a second week in a row, for an outflow of $4.89 billion, while value funds saw a net $0.47 billion flow out.

GRAPHIC: Fund flows: US growth and value funds – https://fingfx.thomsonreuters.com/gfx/mkt/byvrjnreqve/Fund%20flows%20US%20growth%20and%20value%20funds.jpg

Among U.S. sector funds, health care, mining and real estate funds experienced net inflows of $969 million, $575 million and $407 million, respectively.

GRAPHIC: Fund flows: US equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/akvezyaxmpr/Fund%20flows%20US%20equity%20sector%20funds.jpg

Meanwhile, U.S. investors removed a net $9.22 billion from bond funds, although outflows eased from the two-month peak of $14.03 billion in the previous week.

Investors sold a net $5.52 billion of U.S. taxable bond funds and $3.84 billion of municipal bond funds.

U.S. short/intermediate investment-grade funds and high-yield funds witnessed outflows of $5.49 billion and $1.05 billion, respectively.

Meanwhile, U.S. general domestic taxable fixed income funds and inflation-protected funds saw net inflows of $858 million and $134 million, respectively.

GRAPHIC: Fund flows: US bond funds – https://fingfx.thomsonreuters.com/gfx/mkt/egpbkemqqvq/Fund%20flows%20US%20bond%20funds.jpg

Weekly outflows from U.S. money market funds jumped to a 21-month high of $62.66 billion, marking a third straight week of net selling.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by Paul Simao)