US money market funds draw biggest weekly inflow in seven months

(Reuters) – U.S. money market funds received a big influx of capital in the seven days to Nov. 1, driven by investor caution ahead of the Federal Reserve’s policy decision and the Treasury Department’s announcement on its expected funding needs.

According to LSEG data, U.S. money market funds accumulated inflows amounting to a net $56.52 billion during the week, marking the most significant weekly net purchase since March 29.

On Wednesday, the Fed maintained interest rates steady. While Chair Jerome Powell left the door open to more tightening, he also nodded to the impact of a recent surge in bond yields on the economy.

Investors’ selling of U.S. equity funds in the week, eased to a six-week low of $110 million, on a net basis.

Large-cap equity funds received $8.26 billion, the highest in a week since Sept. 13. Small-cap also lured $540 million but investors sold mid-, and multi-cap funds of $1.53 billion and $216 million, respectively.

Investors pulled out a net $4.08 billion from sectoral equity funds in their biggest weekly net selling since June 22, 2022. They offloaded financials, tech and healthcare funds of $1.56 billion, $588 million and $571 million, respectively.

Meanwhile, U.S. bond funds booked outflows for a third straight week, valuing a net $1.64 billion.

U.S. short/intermediate investment-grade funds and high-yield funds suffered a net $2.96 billion and $987 million worth of disposals, respectively. Short/intermediate government & treasury funds still received about $3.59 billion, the biggest amount in three weeks.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru;Editing by Shweta Agarwal)


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