U.S. Equity Fund Outflows Continue Amid Geopolitical Concerns and Tech Earnings Disappointment
In the week ending February 5, U.S. equity funds experienced their fourth weekly outflow in five, driven by geopolitical risks stemming from President Trump's trade tariffs on China. Additionally, weaker-than-expected earnings reports from key technology companies amplified investor concerns.
According to data from LSEG Lipper, investors divested $10.71 billion from U.S. equity funds, marking their largest weekly sales since December 18, 2024. Large-cap equity funds saw a significant outflow of $6.44 billion, the highest weekly figure since December 18. Investors also sold $2.02 billion from small-cap funds, $1.12 billion from multi-cap funds, and $335 million from mid-cap funds.
However, sectoral funds attracted $1.2 billion in inflows for the third consecutive week. Financials and consumer discretionary sectors led the way, with inflows of $1.01 billion and $907 million, respectively.
Investors sought safety in money market funds, acquiring a net $39.61 billion after $35.13 billion in net sales the previous week. Bond funds continued their popularity, attracting $9.22 billion in inflows for the fifth consecutive week. U.S. general domestic taxable fixed income funds, short-intermediate investment-grade funds, and loan participation funds were particularly popular, gaining $4.64 billion, $3.31 billion, and $2.93 billion, respectively.