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U.S. equity funds see outflows on rate hike expectations

U.S. equity funds see outflows on rate hike expectations
© Reuters. FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar/File Photo

(Reuters) – U.S. equity funds suffered outflows in the seven days to July 19 as investors exercised caution ahead of the Federal Reserve’s policy meeting, and bets on rate hikes grew amid robust consumption data.

Investors withdrew a net $3.04 billion from U.S. equity funds during the week, posting the first weekly outflow since June 21, data from Refinitiv Lipper showed.

They liquidated U.S. large-, mid- and multi-cap equity funds of a net $5.89 billion, $548 million, and $454 million, respectively. Meanwhile, small-cap funds had $724 million worth of net purchases.

Expectations of a rate hike next week strengthened following a report from the U.S. Commerce Department indicating strong core retail consumption.

Some sector funds, however, saw heavy demand. Investors poured a net $1.26 billion, $1.04 billion, and $753 million, respectively in financials, tech and industrial sector funds.

Funds linked to U.S. debt instruments saw buying interest for a third successive week as investors purchased about $2.55 billion worth of bond funds.

U.S. high-yield funds received $2.09 billion, the biggest amount in a week since April 5. Investors also purchased general domestic taxable fixed income funds, and short/intermediate investment-grade funds of $302 million and $236 million, respectively.

Meanwhile. U.S. money-market funds witnessed a second weekly outflow in a row, worth about $3.47 billion.

Source: Investing.com

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