(Reuters) – U.S. equity funds recorded net outflows for a fourth straight week in the week to Sept. 14 as a higher-than-expected reading of U.S. inflation raised bets the Federal Reserve will continue to aggressively hike interest rates.
Some investors had expected the U.S. CPI report would show inflation eased in August and provide an opening for the Fed to moderate its policy tightening.
According to Refinitiv Lipper data, investors offloaded a net $10.52 billion of U.S. equity funds, after $14.6 billion worth of sales in the previous week.
GRAPHIC: Fund flows: US equities bonds and money market funds https://fingfx.thomsonreuters.com/gfx/mkt/jnvwemzkbvw/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg
Net selling of U.S. large-cap funds was almost 70% more than a week earlier, at $7.74 billion, while small-cap funds posted a net weekly outflow of $605 million. Mid-cap funds bucked the trend with a net $183 million worth of inflows.
Investors drew a net $5.42 billion and $1.29 billion respectively out of U.S. growth and value funds.
GRAPHIC: Fund flows: US growth and value funds https://fingfx.thomsonreuters.com/gfx/mkt/akvezbrjypr/Fund%20flows%20US%20growth%20and%20value%20funds.jpg
Tech, communication services and financials funds suffered net outflows of $962 million, $595 million and $203 million respectively, but consumer staples drew $1.39 billion worth of net buying.
GRAPHIC: Fund flows: US equity sector funds https://fingfx.thomsonreuters.com/gfx/mkt/zgpomoeyypd/Fund%20flows%20US%20equity%20sector%20funds.jpg
U.S. bond funds attracted $509 million in a second week of net buying, although inflows fell by around half from the previous week.
Investors bought U.S. government and high yield bond funds worth a net $5.32 billion and $555 million respectively but exited general domestic taxable fixed income funds and municipal debt funds to the tune of $1.78 billion and $1.7 billion.
GRAPHIC: Fund flows: US bond funds https://fingfx.thomsonreuters.com/gfx/mkt/byvrjgdbdve/Fund%20flows%20US%20bond%20funds.jpg
Meanwhile, money market funds marked a third week of net outflows, this time of $13.43 billion.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan)
