(Reuters) – Investors were net buyers of U.S. bond funds in the week ended July 6 as rising worries over economic growth increased demand for safe-haven U.S. debt.
According to Refinitiv Lipper data, U.S. bond funds attracted a net $2.72 billion in purchases, marking their first weekly inflow since June 1.
GRAPHIC: Fund flows: U.S. equities, bonds and money market funds https://fingfx.thomsonreuters.com/gfx/mkt/lgpdwzmolvo/Fund%20flows%20U.S.%20equities%20bonds%20and%20money%20market%20funds.jpg
The U.S. benchmark 10-year yield dropped to a six-week low of 2.746 earlier this week, as investors pared back expectations on U.S. policy rate increases as concerns about an economic downturn increase.
The breakeven rates on five-year Treasury Inflation-Protected Securities (TIPS), a measure of expected annual inflation for the next five years, hit a six-month low earlier in the week.
Investors purchased U.S. government and treasury fixed income funds of $5.68 billion, marking the biggest weekly inflow since at least October 2018. They also acquired high yield bond funds of $1.59 billion.
GRAPHIC: Fund flows: US bond funds https://fingfx.thomsonreuters.com/gfx/mkt/xmvjodgnepr/Fund%20flows%20US%20bond%20funds.jpg
U.S. equity funds witnessed a second weekly net selling, worth $4.89 billion, which was a 32% bigger outflow than a week ago.
Investors sold U.S. growth as well as value funds for a second consecutive week, that amounted to outflows of $2.53 billion and $2.19 billion, respectively.
GRAPHIC: Fund flows: US growth and value funds https://fingfx.thomsonreuters.com/gfx/mkt/dwpkrbgzkvm/Fund%20flows%20US%20growth%20and%20value%20funds.jpg
Among sector funds, health care funds lured $1.09 billion worth of inflows, but financials, metals & mining, and industrials suffered $1.08 billion, $708 million and $630 million worth of net selling.
GRAPHIC: Fund flows: US equity sector funds https://fingfx.thomsonreuters.com/gfx/mkt/egvbkxnoapq/Fund%20flows%20US%20equity%20sector%20funds.jpg
Meanwhile, money market funds drew a net 23.76 billion in net buying after three successive weeks of outflows.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Andrew Heavens)