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U.S. investors flee to money market funds amid Ukraine crisis

Published 02/25/2022, 09:29 AM
Updated 02/25/2022, 09:31 AM

(Reuters) - U.S. investors purchased money market funds and withdrew cash from higher risk equity funds in the week to Feb. 23, as a rush for safety dominated markets in the run up to Russia's invasion of Ukraine. U.S. money market funds accumulated capital worth a net $5.98 billion in their first weekly inflows since Jan 26.

Fund flows: US equities bonds and money market funds - https://fingfx.thomsonreuters.com/gfx/mkt/byprjerozpe/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg

Some weak earnings reports added to the gloom as companies, including TripAdvisor Inc (NASDAQ:TRIP) and Home Depot Inc (NYSE:HD), reported disappointing results, while one of the world's largest lithium producers Albemarle (NYSE:ALB) Corp forecast full-year earnings slightly below estimates. Investors sold U.S. equity funds worth $1.92 billion, marking the first weekly outflow in three weeks. U.S. growth-oriented equity funds witnessed net selling of $2.61 billion, the biggest in three weeks, in contrast, value funds received $537 million in net buying.

Fund flows: US growth and value funds - https://fingfx.thomsonreuters.com/gfx/mkt/lgpdwalwwvo/Fund%20flows%20US%20growth%20and%20value%20funds.jpg

Among sector funds, financials and tech had outflows of $1.07 billion and $0.87 billion respectively, while healthcare and consumer discretionary, each had outflows worth about $0.5 billion.

Fund flows US equity sector funds - https://fingfx.thomsonreuters.com/gfx/mkt/lbpgnzonrvq/Fund%20flows%20US%20equity%20sector%20funds.jpg

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., February 18, 2022.  REUTERS/Brendan McDermid

U.S. bond funds lost $3.66 billion in a seventh consecutive week of net selling, but the net selling was 92% lower than the previous week.Investors sold municipal bond funds of $1.35 billion, while U.S. taxable bond funds posted outflows of $1.53 billion in a seventh straight week of net selling. U.S. short/intermediate investment-grade, and high-yield funds saw weekly outflow for seventh week in a row, worth $2.93 billion and $1.14 billion respectively. U.S. general domestic taxable fixed income funds gained $1.15 billion in net buying.

Fund flows: US bond funds - https://fingfx.thomsonreuters.com/gfx/mkt/klvykbzkzvg/Fund%20flows%20US%20bond%20funds.jpg

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