U.S. equity fund inflows ease to a six-week low

BY Reuters | ECONOMIC | 09:03 AM EDT

May 4 (Reuters) - U.S. equity fund inflows ebbed to a six-week low in the week through April 29 as investors concerned over a surge in crude oil prices exercised caution ahead of a monetary policy decision by the Federal Reserve.

According to LSEG Lipper data, investors bought just $911 million worth of U.S. equity funds in their smallest weekly net purchase since March 18.

The Federal Reserve kept interest rates steady last week, but three board members voted to drop the central bank's easing bias, adding a layer of uncertainty around the Fed's policy direction.

The S&P 500, meanwhile, hit a record high of 7,272.52 last Friday, bolstered by upbeat earnings from several major U.S. tech companies.

Investors pumped $1.43 billion into technology stocks, extending a run of net purchases into a fourth successive week. They also offloaded $1.06 billion from healthcare funds.

U.S. bond funds saw an uptick in demand as inflows surged to $4.87 billion, from approximately $3.41 billion in the prior week.

U.S. government bond funds, high yield bond funds and short-to-intermediate investment-grade funds attracted $2.73 billion, $1.97 billion and $1.48 billion, respectively.

Money market funds, meanwhile, faced a third successive weekly outflow to the tune of $13.02 billion.

(Reporting by Gaurav Dogra; Editing by Ronojoy Mazumdar)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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