(Reuters) – U.S. equity funds reported a surge in outflows in the week ending Oct. 5, as reports showing strong labor market demand and persistent core inflation raised concerns that the Federal Reserve would remain firm in raising interest rates.
Data from the Refinitiv Lipper showed that investors sold US equity funds with a net worth of $7.09 billion after dumping a net $4.63 billion in the previous week.
During the said week, PCE price index data showed a rise of 0.3% in August, after declining by 0.1% in July. A report showing a rise in employment in September also raised expectations of further increases.]
Investors were also cautiously awaiting the closely watched monthly Non-Farm Payrolls report on Friday.
US growth funds suffered net sales of $8.62 billion, the largest weekly outflow since Jan. 26, while value funds posted withdrawals of $1.3 billion.
Among the US sector funds, investors exited healthcare and finance funds worth $733 million and $224 million, respectively, but bought consumer discretionary funds of $331 million.
Meanwhile, bond fund inflows fell to a three-week low of $908 million, the data showed.
Investors bought $2.62 billion in high-yield money after six straight weeks of selling, although investment grade short/medium funds and loan-sharing funds posted exchanges of $3.13 billion and $1.07 billion, respectively.
US government bond funds remained in demand for the sixth consecutive week, securing a net $4.88 billion.
Meanwhile, investors pulled $16.57 billion from money market funds after two consecutive weeks of net buying.