July 24 (Reuters) - U.S. investment-grade bond funds and

exchange-traded funds saw massive outflows in the week ended

July 22, as an oil-driven inflation scare pushed Treasury yields

higher and investors cut exposure to fixed-rate corporate debt,

LSEG Lipper data showed.

According to the data, U.S. investment-grade bond funds

recorded $7.1 billion in net outflows during the week, the

largest weekly withdrawal on record, after suffering a record

one-day outflow of $8.2 billion on July 20.

Investment-grade bonds came under pressure from rising

Treasury yields and wider credit spreads, with their longer

maturities and lower coupons making them more sensitive to

interest-rate moves than high-yield debt.

Oil prices have surged nearly 40% this month to cross above

$100 a barrel, fuelled by Houthi attacks on tankers in the Red

Sea and fears of military action against Iran.

The shock has worsened the inflation outlook, prompting

investors to reassess the path of U.S. monetary policy. Traders

more than doubled the implied chance of a Federal Reserve rate

hike at next week's meeting to about one in three, CME Group's

FedWatch tool showed.

The resulting Treasury selloff pushed the benchmark 10-year

yield to its highest since January 2025.

High-yield bond funds, meanwhile, attracted about $534

million, while leveraged-loan funds also saw modest inflows.

High-yield bonds typically offer higher coupons and shorter

maturities, while loans carry floating rates, making both less

exposed to rising government bond yields.

The iShares iBoxx $ Investment Grade Corporate Bond ETF

, which tracks the Markit iBoxx investment-grade

benchmark, has fallen 2.58% so far this month, compared with a

0.93% decline in its high-yield counterpart.