(Reuters) – U.S. bond funds saw massive outflows in the week to September proceed with caution The pace and duration of U.S. rate hikes has crept in ahead of the Fed’s policy decision.
U.S. bond funds recorded outflows worth $7, according to Refinitiv Lipper. 33 Billion Dollars Weekly Net Sales Since August 10.
Chart: Money Flow: US Equity, Bond and Money Market Funds https://fingfx.thomsonreuters.com/gfx/mkt/gdvzyxzklpw/Fund%20flow% US % 10 Stock % 20 Bond %10 and %10 money %10market%20funds.jpg
The Federal Reserve raised its benchmark interest rate by 75 basis points on Wednesday, the third time in a row to raise the benchmark interest rate. Rates are expected to hit 4.4 percent this year, which is 100 basis points higher than the Fed’s forecast three months ago.
10 Year benchmark treasury bond yield reaches
– Up 3.692% on Friday is expected to rise for an eighth straight week as investors position for more aggressive U.S. interest rate hikes ahead.
U.S. Short/Mid-Tier Investment Grade, High Yield and General Domestic Taxable Fixed Income Funds, All Facing Outflows, Value 3.24 Billion Dollars, 1.59 Billion Dollars and 692 One million U.S. dollars.
However, the government bond fund received 3.10 ten $100 million inflows for the fourth week in a row.
Graph: Fund Flow: US Bond Fund https://fingfx.thomsonreuters.com/gfx/mkt/byvrjgzxove/Fund%10Flow%20US %20link%20funds.jpg
Meanwhile, US stock funds get $3. 99 Net purchases hit $1 billion after facing outflows for four weeks.
Value funds invest in companies with low valuations and stable growth, and receive 731 million dollars in inflows, while growth funds then attracted 321 the first weekly inflow since August 10.
“Value funds are generally less sensitive to interest rates than growth funds, which results in higher day-to-day volatility when rates rise during
Smaller, better ,” said Michael Crook, chief investment officer at Mill Creek Capital Advisors.
“We expect value stocks to continue to outperform growth until the end of the Fed rate hike cycle, which could be a good fit for 2023 or even 2024.”
Chart: Money Flow: US Growth and Value Funds https://fingfx.thomsonreuters.com/gfx/mkt/zgpomoqaopd/Fund%flow%10 U.S. % Growth %10and%20value%10funds.jpg
In sector-specific funds, technology and utilities received $692 million and 272 million dollars, but financial records outflow $1. 59 Billion dollars.
Meanwhile, investors bought $6 billion in safer money market funds
Chart: Fund Flow: US Equity Sector Fund https://fingfx.thomsonreuters.com/gfx/mkt/jnvwemqjnvw/Fund%20flow%20 US % 10 Equity % 20sector%10funds.jpg