U.S. equity funds post biggest weekly outflow in more than 4 months

U.S. equity funds faced big outflows in the week to April 20 as concerns over economic growth, rising yields and prospects of aggressive monetary policy steps to stem inflation fanned risk-off sentiment.

According to Refinitiv Lipper data, U.S. equity funds saw a net outflow of $16.57 billion, marking the biggest weekly outflow since Dec. 15.

Concerns over a surge in real yields hit growth stocks in the reported week. Yields on 10-year Treasury Inflation-Protected Securities (TIPS) briefly turned positive this week for the first time since March 2020.

A big drop in subscribers for streaming giant Netflix (NASDAQ:NFLX) also weighed on sentiment, hitting demand for growth and tech-related funds.

U.S. investors sold a net $17.06 billion of large-cap funds, marking their biggest outflow since August 2019. Small- and mid-cap funds saw net outflows of $1.11 billion and $0.96 billion, respectively.

Data for growth funds showed weekly heavy selling continued for a second week in a row, for an outflow of $4.89 billion, while value funds saw a net $0.47 billion flow out.

Among U.S. sector funds, health care, mining and real estate funds experienced net inflows of $969 million, $575 million and $407 million, respectively.

Meanwhile, U.S. investors removed a net $9.22 billion from bond funds, although outflows eased from the two-month peak of $14.03 billion in the previous week.

Investors sold a net $5.52 billion of U.S. taxable bond funds and $3.84 billion of municipal bond funds.

U.S. short/intermediate investment-grade funds and high-yield funds witnessed outflows of $5.49 billion and $1.05 billion, respectively.

Meanwhile, U.S. general domestic taxable fixed income funds and inflation-protected funds saw net inflows of $858 million and $134 million, respectively.

Weekly outflows from U.S. money market funds jumped to a 21-month high of $62.66 billion, marking a third straight week of net selling.