U.S. equity funds post biggest weekly outflow in five weeks

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FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration

(Reuters) – U.S. equity funds witnessed their biggest weekly outflow in five weeks in the week to July 20, as cautious investors gear up ahead of the Federal Reserve’s policy meeting next week.

According to Refinitiv Lipper data, U.S. equity funds recorded $8.45 billion worth of net selling, which was the biggest weekly outflow since June 15.

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

The Fed is expected to raise policy rates by another 75 basis points at the end of the July 26-27 meeting, as it seeks to balance the risks of a stubbornly high inflation and the likelihood of a recession.

U.S. growth funds booked outflows of $3.46 billion after small purchases in the week before, while investors exited value funds worth $1.62 billion in a fourth subsequent week of net selling.

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

Selling in bond funds stood at a net $4 billion, much higher than the outflows of $371 million in the previous week.

Investors disposed of U.S. municipal bond funds of $897 million, marking their first weekly net selling in three weeks, while U.S. taxable bond funds recorded outflows of $3.43 billion.

U.S. short/intermediate investment-grade funds, short/intermediate government & treasury funds and high yield funds suffered outflows of $3,008 million, $1,998 million and $1,060 million, respectively.

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

Meanwhile, money market funds lured a third weekly inflow of $4.28 billion, although purchases reduced by about 57% from the previous week.

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

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shailesh Kuber)

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