(Reuters) – U.S. investors remained net sellers of bond funds for a fourth straight week on increased expectations that the U.S. Federal Reserve will be more aggressive with its interest rate policy this year to tame inflation. According to Refinitiv data, investors sold U.S. bond fund units worth $4.5 billion, a third less than the previous week.
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The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, surged beyond 1.3% on Friday, its highest since February 2020. U.S. municipal debt funds saw outflows worth $1.79 billion, the biggest since April 2020. Investors also sold U.S. short/intermediate investment-grade funds to the tune of $1.2 billion, but bought general domestic taxable fixed income funds worth $2.53 billion. Meanwhile, U.S. inflation protected funds witnessed outflows of $1.7 billion, the largest in 22 months.
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U.S. equity funds also faced outflows worth $7.92 billion during the week.
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Among sector funds, consumer discretionary, technology and financial funds saw net selling of $1.32 billion, $1.12 billion and $231 million respectively, while consumer staples pulled in $707 million in net buying.
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U.S. money market funds witnessed outflows of $17.73 billion after attracting $25.47 billion in inflows in the previous week.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Tomasz Janowski)
