U.S. Markets closed

UPDATE 2-U.S.-based investment-grade bond funds post inflows for 3rd straight week

By Jennifer Ablan

(Adds U.S.-based equity, money-market funds, table) By Jennifer Ablan June 20 (Reuters) - U.S.-based investment-grade corporate bond funds attracted over $3.65 billion of net new cash in the week ended Wednesday, for a third consecutive week of inflows, according to data released on Thursday by Refinitiv's Lipper. Overall, taxable bond funds had net inflows of greater than $7 billion for a second straight week. "This was the group’s two largest weekly net inflows since the first week of the year," said Pat Keon, senior research analyst at Lipper. "Looking at the peer group breakouts, the net inflows are almost across the board." Core Plus Bond Funds had the largest increases with more than $1.2 billion of inflows, followed by short investment-grade bond funds with more than $1.1 billion of inflows, and corporate debt funds BBB-rated with more than $1.1 billion. Wall Street’s main indexes and corporate credit markets have gained in recent weeks on expectations that the Federal Reserve will cut interest rates and hopes of a revival of trade talks between the United States and China at the Group of 20 meeting next week in Japan. On Thursday, the benchmark S&P 500 index, which has risen about 7% so far in June, posted a record closing high. "The Fed’s belief that the economy is weakening sparked a bond rally this week," Keon said. "The yield on the 10-year Treasury note dipped below 2.00% this week and this yield had been as high as 2.5% just 6 weeks ago." For their part, U.S.-based equity funds posted cash withdrawals of $3.68 billion for the week ended Wednesday, following the previous week's inflows of $4.4 billion. U.S.-based money-market funds also posted outflows for the week, roughly $800 million of net cash withdrawals. That came after eight consecutive week of inflows, according to Lipper data. The following is a broad breakdown of the flows for the week, including mutual funds and exchange-traded funds: Sector Flow change Pct of Assets Count ($ blns) Assets ($ blns) All Equity Funds -3.683 -0.05 7,254.865 11,824 Domestic Equities 1.143 0.02 5,185.058 8,420 Non-Domestic -4.826 -0.24 2,069.807 3,404 Equities All Taxable Bond 7.204 0.25 2,938.753 5,839 Funds All Money Market -0.798 -0.03 3,039.256 996 Funds All Municipal Bond 0.856 0.18 470.857 1,343 Funds (Reporting by Jennifer Ablan Editing by James Dalgleish, Leslie Adler and Jonathan Oatis)