U.S. Equity Funds Attract Inflows as Inflation Concerns Ease and Earnings Boost Risk Appetite
U.S. equity funds experienced inflows for the first time in three weeks, driven by declining inflation concerns and robust fourth-quarter corporate earnings.
According to LSEG Lipper, investors purchased a net $1.59 billion worth of U.S. equity funds during the week ending February 19. This marks only the second weekly net purchase in seven weeks.
The S&P 500 index reached a record high of 6147.45 on Wednesday, supported by a positive corporate earnings outlook and strong results from its constituents.
Data from LSEG indicates that approximately 76% of S&P 500 companies have exceeded expectations in their fourth-quarter earnings reports.
U.S. multi-cap equity funds saw a net inflow of $1.66 billion, the largest weekly inflow since November 20. Large-cap funds also attracted net inflows of $877 million. However, small- and mid-cap funds experienced net outflows of $1.62 billion and $718 million, respectively.
Sectoral funds faced outflows for the second straight week, with investors withdrawing $792 million and $593 million from consumer discretionary and healthcare funds, respectively.
Bond funds maintained their appeal for a seventh consecutive week, with net inflows totaling $8.62 billion. General domestic taxable fixed income funds received $2.14 billion in net purchases, marking the seventh consecutive weekly inflow.
Investors also invested in short-to-intermediate government and treasury funds, short-to-intermediate investment-grade funds, and loan participation funds, with net inflows of $1.77 billion, $1.68 billion, and $1.6 billion, respectively.
U.S. money market funds witnessed net sales of $14.11 billion, marking the third weekly outflow in four weeks.