Inflows into U.S. bond funds dwarf equity purchases in 2021 -Lipper

  • 12/10/2021
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Dec 10 (Reuters) - U.S. bond funds have attracted record inflows this year, despite worries about inflation and expectations the Federal Reserve could roll back its pandemic-era stimulus measures earlier. According to Refinitiv Lipper data, U.S. bond funds attracted a net $612 billion in the first eleven months of this year, already surpassing the record inflow of $486.18 billion recorded in 2019. Meanwhile, U.S. equity funds saw net inflows of $248.81 billion after two years of outflows. The higher inflows into U.S. bond funds, despite a rally in equities, highlights an investor preference for safety and stable returns during the second year of the COVID-19 pandemic. The Lipper data showed U.S. equity funds have delivered a return of 16.4% on average so far this year, compared with 0.8% for bond funds. U.S. taxable bond funds drew a record $465.89 billion in net buying while municipal bond funds secured purchases of $96.5 billion. U.S. short/intermediate investment-grade funds saw inflows of $242.22 billion, a 12% increase over the first 11 months of 2020, U.S. general domestic taxable fixed income funds received $113.35 billion, a three-fold increase, while inflation protected funds attracted a record $70.77 billion. Among equity sector funds, financials are on track for their first annual inflows in four years, totalling $23.91 billion to the end of November, while investors purchased tech funds worth $22.22 billion. Meanwhile, U.S. money market funds are set for a fifth consecutive year of inflows with net inflows of $266.36 billion so far. In the week ended Dec. 8, U.S. bond funds attracted a net $4.83 billion, although equity funds witnessed outflows of $6.46 billion after net purchases of $7.87 billion in the previous week.

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