US bond funds witnessed a surge in outflows in the week to Dec. 1 on rising prospects that the US Federal Reserve will ramp up the pace of unwinding its bond purchases and will lift rates as soon as mid-2022, reports Reuters.
According to Refinitiv Lipper data, investors sold US bond funds worth a net $2.16 billion, compared with their net selling of $245 million in the previous week.
Despite concerns over the Omicron coronavirus variant, the two-year US Treasury yield jumped 7 basis points on Wednesday after the Fed chief said that in December the Fed will discuss whether to end their bond purchases a few months earlier than expected.
US taxable bond funds witnessed net selling of $3.03 billion, that was the largest weekly outflow since early-April 2020. However, municipal bond funds attracted inflows of $1.14 billion.
US short/intermediate investment-grade funds and loan participation funds witnessed outflows of $1.84 billion and $304 million respectively, while weekly inflows into US inflation protected funds also dropped to a four-month low of $169 million.
However, US equity funds drew $7.56 billion in net buying, their largest inflow in five weeks.
Large cap funds pulled in $13.09 billion after two straight weeks of net selling, although investors sold small- and mid-cap equity funds worth $1.96 billion and $104 million respectively.
US growth funds attracted $621 million in net purchases after four straight weeks of outflows. However, value funds saw net selling of $2.22 billion, the biggest in six weeks.
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