(Reuters) - U.S. equity funds received their biggest inflow in 18 weeks in the week ended Oct. 26, buoyed by hopes that the Federal Reserve would slow the pace of its interest rate hikes to combat the economic downtrend.
U.S. equity funds obtained a net $7.9 billion in the week, the biggest inflow since the end of June, data from Refinitiv Lipper showed.
Graphic: US fund flows - https://fingfx.thomsonreuters.com/gfx/mkt/mopakmwelpa/us%20asset%20flows.jpg
U.S. business activity contracted for a fourth straight month, data on Monday showed, suggesting that the Fed's rate increases have softened the economy, which in turn raised hopes that the central bank could begin slowing the pace of the hikes.
Graphic: US sector flows - https://fingfx.thomsonreuters.com/gfx/mkt/gdpzqrkxnvw/us%20equity%20sector%20flows.jpg
U.S. value funds attracted $1.8 billion, while growth funds received just $1.1 billion, indicating investors continue to prefer value over growth stocks.
Graphic: US growth vs value flows - https://fingfx.thomsonreuters.com/gfx/mkt/lbpggrjkxpq/US%20growth%20vs%20value%20flows.jpg
At the same time, U.S. bond funds continued to witness outflows, as they faced net sales worth $2.1 billion, their sixth consecutive outflow.
Graphic: US bonds flows - https://fingfx.thomsonreuters.com/gfx/mkt/zdpxdyqmxpx/US%20bond%20flows.jpg
U.S. government bond funds and inflation-linked funds faced outflows worth $1.7 billion and $1.4 billion respectively.
On the other hand, U.S. high-yield bonds funds obtained $2.75 billion their biggest inflow in three months, suggesting investor interest in junk bonds after the big selloff in recent months.