U.S. Equity Funds Witness Inflows as Inflation Worries Ease
U.S. equity funds experienced inflows for the first time in three weeks, signaling improved risk appetite driven by easing inflation concerns and robust corporate earnings. According to LSEG Lipper, investors purchased $1.59 billion worth of equity funds, marking only the second weekly net inflow in seven weeks.
The S&P 500 index reached a record high on Wednesday, bolstered by strong earnings projections and positive results from constituent companies. LSEG data reveals that 76% of S&P 500 companies have reported better-than-expected earnings for the fourth quarter.
Multi-cap equity funds witnessed net inflows of $1.66 billion, the highest weekly inflow since November 20. Large-cap funds attracted $877 million, while small- and mid-cap funds experienced net outflows of $1.62 billion and $718 million, respectively.
Sectoral funds saw outflows for the second consecutive week, with consumer discretionary and healthcare funds losing $792 million and $593 million, respectively.
In contrast, bond funds maintained their popularity, attracting $8.62 billion in net purchases. Domestic taxable fixed income funds witnessed $2.14 billion in net inflows, marking the seventh consecutive weekly inflow.
Government and treasury funds, investment-grade funds, and loan participation funds also saw net inflows of $1.77 billion, $1.68 billion, and $1.6 billion, respectively.
U.S. money market funds experienced net sales of $14.11 billion, the third weekly outflow in four weeks.