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Geopolitical Tensions And Rising Bond Yields Cause Outflows From US Equities Funds

VA Disability Benefits
VA Disability Benefits; Source- CNET

The week ending October 18 saw significant withdrawals from U.S. equities funds due to rising bond yields and intensifying geopolitical unrest in the Middle East.

Economy Is Still Growing

LSEG data shows that investors sold $4.57 billion of U.S. stock funds on a net basis during the week, marking outflows for the fifth straight week.

Yields on U.S. Treasury bonds increased as proof that the economy is still growing despite the Federal Reserve’s efforts to control inflation by raising interest rates was provided by consensus-topping retail sales data on Tuesday.

Growth funds saw net sales of $1.52 billion in equities after receiving inflows of approximately $1.93 billion over the previous week. Value funds had withdrawals as well; the net amount was $1.12 billion.

Mortgage Funds

With $931 million and $707 million in outflows, respectively, utilities and tech led sectoral outflows. However, $385 million was invested in industrials, the largest weekly inflow since August 9.

US Equities Funds

Source- MARCA

In addition, investors sold off almost $3.66 billion in bond funds, down from net purchases of approximately $1.13 billion the week before.

Net selling of U.S. high yield and short/intermediate investment-grade funds was $1.93 billion and $2.4 billion, respectively. Despite this, mortgage funds and short/intermediate government and treasury nonetheless managed to secure $742 million and $489 million in inflows, respectively.

Additionally, investors withdrew from money market funds for a second week in a row, with net sales of around $97.26 billion in the week ending October 18.

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