US bond funds rack up biggest weekly inflow in three months

Nov 10 – US investors poured a massive sum into bond funds in the seven days leading to Nov. 8 on hopes of a turnaround in Treasury bond prices following the Federal Reserve’s decision to keep interest rates unchanged.

A report from the US Labor Department indicating a slowdown in job growth in October, also lifted bond prices last week. The yields on the benchmark 10-year US Treasury bonds, which move inversely to prices, hit a five-week low of 4.484% last Friday.

According to LSEG data, US bond funds amassed a net USD 3.61 billion worth of inflows during the week, the biggest amount since July 5.

US high yield bond funds saw a significant boost in demand as they received a net USD 6.29 billion, the biggest weekly inflow since mid-April 2020.

Investors also poured about USD 867 million and USD 687 million, respectively into general domestic taxable fixed income, and loan participation funds, while pulling a net 1.92 billion out of US short/intermediate government & treasury funds.

Meanwhile, US equity funds secured USD 1.9 billion, the first weekly inflow in eight weeks.

Small-cap funds were notably in demand as they received USD 1.96 billion, the biggest amount since June 14. Additionally, large-cap funds saw USD 930 million worth of net purchases but mid-, and multi-cap funds had outflows of USD 661 million and USD 396 million.

By sector, tech and financial sector funds attracted USD 1.25 billion and USD 594 million, respectively, while consumer staples had an outflow of USD 500 million on a net basis.

At the same time, US money market received USD 6.47 billion, about a tenth of USD 56.1 billion worth of net purchase in the previous week.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Toby Chopra)