U.S. equity funds post biggest weekly outflow in four months

People walk by the New York Stock Exchange (NYSE) in Manhattan, New York City

(Reuters) – U.S. equity funds faced heavy outflows in the week to April 13, as investors were spooked by rising yields and fears that the impending monetary tightening from the Federal Reserve would slow growth.

According to Refinitiv Lipper data, U.S. equity funds suffered outflows of $12.57 billion, marking the biggest weekly net selling since Dec. 15.

Graphic: Fund flows: US equities bonds and money market funds – https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgkmmmpb/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg

The 10-year U.S. Treasury yield touched a three-year peak last week, hitting growth stocks. Value stocks also fell after comments from Federal Reserve officials raised concerns that a rapid policy tightening to tame inflation could slow the economic growth.

Meanwhile, data released last week showed that U.S. consumer prices increased by the most in 16-1/2 years in March.

Growth funds saw weekly net selling of $6.91 billion, which was the biggest outflow since Jan 26, while value funds reported sales continuing for a fifth week, amounting to a net $2.95 billion.

Graphic: Fund flows: US growth and value funds – https://fingfx.thomsonreuters.com/gfx/mkt/zdvxogyydpx/Fund%20flows%20US%20growth%20and%20value%20funds.jpg

Among U.S. sector funds, investors exited financial funds worth $1.23 billion in a second straight week of net selling. Meanwhile, consumer staples and utilities obtained inflows of $609 million and $536 million, respectively.

Graphic: Fund flows: US equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/movanommnpa/Fund%20flows%20US%20equity%20sector%20funds.jpg

U.S. investors also offloaded bond funds of $14.01 billion, posting the biggest weekly withdrawal in two months.

Investors jettisoned taxable bond funds worth $10.25 billion marking the largest outflow since Feb. 16, while municipal funds recorded capital outgo of $4.39 billion. Investors sold high yield bond funds worth $4.27 billion, and U.S. short/intermediate investment-grade funds worth $1.33 billion.

Meanwhile, loan participation funds had inflows of $874 million, marking a fourth consecutive week of inflows.

Graphic: Fund flows: US bond funds – https://fingfx.thomsonreuters.com/gfx/mkt/znpnemddzvl/Fund%20flows%20US%20bond%20funds.jpg

Meanwhile, U.S. money market funds faced net selling of $26.4 billion, compared with outflows of $29.56 billion in the previous week.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Amy Caren Daniel)