US equity funds post fourth weekly outflow on inflation worries, rate concerns
Sept 18 (Reuters) – US equity funds recorded outflows for a fourth consecutive week in the week to September 18, as rising crude oil prices heightened inflation concerns and expectations of a Federal Reserve rate hike added to investor caution ahead of its policy decision.
US equity funds recorded net redemptions of $31.44 billion during the week, largely matching the $32 billion withdrawn a week earlier, LSEG Lipper data showed.
Crude oil prices rose to four-month highs during the week, fueling inflation concerns and lifting Treasury yields, which weighed on growth-oriented funds.
The Fed raised interest rates by 25 basis points on Wednesday and signaled that further tightening may be needed to curb inflation fueled by higher energy costs linked to the war in Iran.
Investors withdrew $28.71 billion, $1.73 billion and $3.16 billion from US large-cap, mid-cap and multi-cap funds, respectively. In contrast, small-cap funds attracted $568 million in weekly inflows.
Equity sectoral funds, meanwhile, recorded weekly inflows of $2.29 billion – the largest in seven weeks – led by financials, consumer discretionary and technology, which attracted net purchases of $1.37 billion, $795 million and $775 million, respectively.
Net purchases in global bond funds, meanwhile, eased to a five-month low of $554 million.
Short-to-intermediate government and Treasury funds led the gains, attracting $3.49 billion in inflows for an 11th consecutive week. Meanwhile, municipal debt funds and short-to-intermediate investment-grade funds recorded notable outflows of $1.81 billion and $817 million, respectively.
Money market funds recorded net weekly outflows of $58.87 billion, the largest weekly withdrawal since July 15.
(Reporting by Gaurav Dogra; Editing by Vijay Kishore)
