US bond, equity funds lure money inflows as bond yields drop

US bond funds attracted a massive amount of money in the week ended April 14 as bond yields dropped on easing worries over higher inflation and amid strong demand for 30-year bonds in this week’s auction.

According to Refinitiv data, US bond funds received an inflow of $10.2 billion, though it was about 30% less than in the previous week.

The data showed investors put $4.2 billion into US taxable bond funds, and $2.4 billion into U.S municipal bond funds.

US Treasury yields dropped this week, helped by the release of US consumer prices data which showed inflation was not rising wildly, giving the Federal Reserve ample room to keep policy loose.

US equity funds received $2.1 billion worth of inflows, as the S&P 500 index and the Dow Jones index hit record highs this week, buoyed by optimism over strong second-quarter earnings.

Analysts expect profits for S&P 500 firms to jump 25% from a year earlier, according to Refinitiv IBES data, which would be the strongest performance for the quarter since 2018.

US tech funds received $1.1 billion, the highest among other sectors, followed by the industrial sector funds obtained $474 million.

On the other hand, US money market funds saw an outflow of $28.3 billion, the biggest since December last year.

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