US equity funds lure inflows for third straight week

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(Reuters) – US equity funds saw further inflows for the third straight week in the week ended November 2, buoyed by expectations that the Federal Reserve would soon slow the pace of its rate hikes.

Investors bought a net $10.19 billion worth of US equity mutual funds, according to data from Refinitiv Lipper, compared to purchases of $7.93 billion the previous week.

CHART – Flows of funds: US equities, bonds and money market funds

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Solid gains from Apple Inc. and energy giants Chevron, Exxon Mobil also boosted investor confidence during the reporting week.

Investors bought $6.62 billion and $1.59 billion in US large- and small-cap equity funds, respectively, although mid-cap funds saw outflows of $473 million.

By sector, health care, technology, and consumer staples funds saw inflows of $630 million, $478 million, and $393 million, respectively. However, the US Federal Reserve hiked interest rates by 75 basis points and said the peak in interest rates was likely to be higher than previously expected.

CHART – Flows of funds: US equity sector funds

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

Meanwhile, bond fund outflows were just $14 million, a seven-week low. Investors bought $5.07 billion in US high yield bond funds, their largest weekly net purchases since August 2020, but government bond funds saw $1.75 billion worth of withdrawals after attracting nine weeks of inflows.

GRAPH – US Bond Fund

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

Money market funds saw $46.64 billion in inflows after two straight weeks of outflows.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Chizu Nomiyama)

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