U.S. bond funds see weekly inflows after four weeks

Investors were net buyers of U.S. bond funds in the week ended July 6 as rising worries over economic growth increased demand for safe-haven U.S. debt.

According to Refinitiv Lipper data, U.S. bond funds attracted a net $2.72 billion in purchases, marking their first weekly inflow since June 1.

The U.S. benchmark 10-year yield dropped to a six-week low of 2.746 earlier this week, as investors pared back expectations on U.S. policy rate increases as concerns about an economic downturn increase.

The breakeven rates on five-year Treasury Inflation-Protected Securities (TIPS), a measure of expected annual inflation for the next five years, hit a six-month low earlier in the week.

Investors purchased U.S. government and treasury fixed income funds of $5.68 billion, marking the biggest weekly inflow since at least October 2018. They also acquired high yield bond funds of $1.59 billion.

U.S. equity funds witnessed a second weekly net selling, worth $4.89 billion, which was a 32% bigger outflow than a week ago.

Investors sold U.S. growth as well as value funds for a second consecutive week, that amounted to outflows of $2.53 billion and $2.19 billion, respectively.

Among sector funds, health care funds lured $1.09 billion worth of inflows, but financials, metals & mining, and industrials suffered $1.08 billion, $708 million and $630 million worth of net selling.

Meanwhile, money market funds drew a net 23.76 billion in net buying after three successive weeks of outflows.