NEW YORK (Reuters) - Investors did some opportunistic buying because of higher yields in the debt market as U.S.-based government-Treasury funds attracted $530 million of net new cash in the week ended Wednesday, marking the group’s sixth straight week of inflows, according to Lipper data on Thursday.
Further out in the credit quality spectrum, U.S.-based high-yield “junk” bond funds attracted inflows of $526 million in the week ended Wednesday, following the previous week’s outflows of $2.49 billion, according to Lipper.
The competition for yield has broadened throughout the credit markets, with yields on Treasury notes and bonds edging higher since the start of the year.
“The yield on the benchmark 10 year-Treasury has crept up all year peaking at just over the 3.00-percent barrier last week,” said Pat Keon, senior research analyst at Thomson Reuters Lipper. “It has come down a bit since then, closing yesterday at 2.97 percent. It closed 2017 at 2.41 percent. Treasuries are considered risk-free because they are backed by the U.S. government. Therefore a good place to park money during uncertain and/or volatile market activity.”
Overall, U.S.-based taxable bonds attracted $916 million in the week ended Wednesday, marking the group’s eighth straight week of inflows, Lipper said. U.S.-based money market funds, whose yields have also climbed higher, attracted $844 million in the week ended Wednesday, their second straight week of inflows.
Equity flows have been choppy in recent weeks, underscoring investor concerns that economic growth has moderated and that future interest-rate increases by the Federal Reserve could slow growth.
U.S.-based equity mutual funds posted outflows of $1.59 billion in the week ended Wednesday, following the previous week’s outflows of $1.9 billion, Lipper data showed. U.S.-based equity exchange-traded funds - generally believed to represent the investment behavior of institutional investors, including fast-moving hedge funds - attracted inflows of $2.7 billion in the week ended Wednesday, marking their fourth consecutive week of inflows.
U.S.-based emerging market equity funds posted outflows of $611 million for the week, their first weekly outflow of 2018, according to Lipper data.
Reporting by Jennifer Ablan; Editing by Lisa Shumaker and James Dalgleish