Oct 7 (Reuters) – U.S. equity funds recorded a surge in outflows in the week ending Oct. 5. Reports of strong labor market demand and persistent core inflation have raised concerns that the Federal Reserve will continue to aggressively raise rates.
Investors sold $7.09 billion worth of net U.S. equity funds after selling $4.63 billion net last week, according to Refinitiv Ripper data.
Fund Flow: US Stocks, Bonds, Money Market Funds
During the week reported, Personal Consumption Expenditure (PCE) price index data showed a 0.3% gain in August after falling 0.1% in July. Reports that employment surged in September also raised hopes for further rate hikes.read more]read more
Investors also cautiously awaited the closely watched monthly nonfarm payrolls report due on Friday.
US growth funds suffered net sales of $8.62 billion worth, the biggest weekly outflow since January 26, while value funds recorded $1.3 billion worth of withdrawals.
Fund Flows: US Growth and Value Funds
Of US sector funds, investors withdrew $733 million and $224 million worth of healthcare and financial funds, respectively, but purchased $331 million of consumer discretionary funds .
Fund Flows: US Equity Sector Funds
Meanwhile, the data showed that bond outflows eased to a three-week low of $908 million.
Investors bought $2.62 billion of high-yield funds after six straight weeks of selling, while short/middle investment grade and loan-participating funds sold $3.13 billion and $1.07 billion respectively. Recorded $10,000 disposal.
US government bond funds enjoyed a sixth consecutive week of demand, netting $4.88 billion.
Fund Flow: US Bond Fund
Meanwhile, investors withdrew $16.57 billion from money market funds after two consecutive weeks of net long positions.
Reported by Gaurav Dogra and Patturaja Murugaboopathy from Bangalore.
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