U.S. bond funds post biggest weekly outflow in three months

(Reuters) - U.S. bond funds witnessed massive outflows in the week to Sept. 28 as investors girded for further rates hikes from the Federal Reserve to control stubborn inflation. Investors withdrew a net $9.08 billion out of U.S. bond funds, marking their biggest weekly net selling since June 22, Refinitiv Lipper data showed.

The benchmark U.S. Treasury 10-year yields, which move inversely to prices, briefly jumped to 4.019% on Wednesday, the highest since Oct. 2008. Outflows from U.S. short/intermediate investment-grade and high-yield bond funds surged to $6.28 billion and $3.2 billion respectively from $3.59 billion and $1.81 billion in the previous week.

Government bond funds however, received $6.92 billion, marking their biggest weekly inflow since May 18.

Meanwhile, U.S. equity funds witnessed disposals of $4.86 billion after a weekly net purchase worth $3.99 billion. Growth and value were both out of favour with net outflows of $4.28 billion and $2.04 billion respectively.

Among sector specific funds, industrials, healthcare and financials suffered net selling of $740 million, $632 million and $529 million respectively.

Meanwhile, safer money market funds obtained a net $3.74 billion in a second straight week of net buying.

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