It is reported that U.S. bond funds attracted the biggest weekly inflows in 18 months as there were signs that easing inflation would boost hopes the Federal Reserve might scale back the size of its interest rate hike.
Refinitiv Lipper data shows U.S. bond funds. attracted net purchases of $10.52 billion, the largest weekly inflow since late June 2021.
Data released on Thursday showed U.S. consumer prices. fell sharply for the first time in more than 2-1/2 years in December amid a drop in the price of gasoline and other goods, indicating that inflation is now on a sustained downward trend.
US taxable bond funds received $8.8 billion, the biggest weekly inflows since late June 2021, while municipal bond funds drew a net $1.74 billion.
Investors act by buying short U.S. investment grade funds. of $3.63 billion in their widest weekly net buying since Jan 2022, while high-yield government bond funds, general domestic taxable fixed income and government received $2.35 billion, $1.82 billion and $927 million respectively.
Outflows from equity funds fell to an eight-week low of $2.01 billion. U.S. growth and value funds. remain out of favor, with net sales of about $4 billion and $757 million, respectively.
However, several sector funds are gaining attention with investors starting to buy industrial, financial and materials sector funds with a net worth of $1.13 billion, $477 million and $435 million, respectively.
Meanwhile, money market funds posted $17.22 billion in outflows after two weeks of inflows.
