(Reuters) – U.S. equity funds faced outflows for the first time in four weeks in the week ended July 7, as investors abandoned risky assets, with the spread of the COVID-19 Delta variant casting doubts over an economic recovery.
Data from Refinitiv Lipper showed U.S. equity funds witnessed a net outflow of $5.2 billion in the week, compared with an inflow of $4.8 billion in the previous week.
Graphic: Fund flows into U.S. equities bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/dgkvlrkrnvb/Fund%20flows%20into%20U.S.%20equities%20bonds%20and%20money%20market.jpg
Recent data on the labor market and services sector has given investors pause that the economy may not be strengthening as initially anticipated and some underlying weakness may be emerging.
Data showed this week that U.S. services industry activity grew at a moderate pace in June, likely restrained by labor and raw material shortages.
U.S. small-cap funds and mid-cap funds saw outflows worth $2.2 billion and $839 million respectively, while large-cap funds received $899 million, which was the smallest inflow in four weeks.
Among sector funds, investors sold $1.4 billion in U.S real estate funds, after five weeks of net purchases. Financials sector funds also faced outflows for a fourth consecutive week.
Graphic: Flows into U.S. equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/nmovaxoxxpa/Flows%20into%20U.S.%20equity%20sector%20funds.jpg
Graphic: Fund flows into U.S. growth and value funds – https://fingfx.thomsonreuters.com/gfx/mkt/yzdvxlwyyvx/Fund%20flows%20into%20U.S.%20growth%20and%20value%20funds.jpg
Meanwhile, U.S. bond funds lured $9.5 billion in the week, as investors rushed to safety, with U.S. 10-Treasury yields dropping to a 4-1/2 month low this week.
Graphic: Flows into U.S. bond funds – https://fingfx.thomsonreuters.com/gfx/mkt/jznpnyodevl/Flows%20into%20U.S.%20bond%20funds.jpg
U.S. short and intermediate investment-grade funds attracted $3.9 billion, the most in two months. U.S. municipal debt funds secured $2.2 billion, the most in four weeks.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Andrea Ricci)
