US equity funds continued to attract investors for the fifth straight week, with net inflows of $2.6 billion in the week ended Sunday, marking the lowest weekly net buying since early March.
Investors’ continued anticipation of three rate cuts this year has fueled persistent inflows, even as a cautious stance has been observed ahead of the upcoming inflation report. Large-cap funds were particularly attractive, with net purchases of $6.13 billion, although that was down from the $15.3 billion seen the previous week.
Small-cap funds also rallied, with net inflows of $1.45 billion. However, the enthusiasm did not extend to all fund types, as multi- and mid-cap funds reported net inflows of $2.86 billion and $378 million, respectively.
Sector-specific funds saw mixed results, with technology and industrials funds seeing net outflows of about $1 billion and $907 million, respectively. On the other hand, the healthcare sector saw net outflows, losing $802 million.
In the fixed income space, US bond funds reversed last week's trend by attracting $3.47 billion in net purchases, compared with $1.47 billion in outflows the previous week.
Short/mid-term funds led the way with $1.88 billion in inflows, the highest in three weeks. Lending participation and domestic taxable fixed income funds also saw inflows of $755 million and $506 million, respectively.
Despite the positive moves in stock and bond funds, money market funds did not perform well either, experiencing net sales of $12.08 billion. This marked the second consecutive week of outflows from these funds.
Flows into different portfolios reflect mixed investor sentiment, balancing optimism about potential rate cuts with a cautious approach to economic data and inflation concerns.
Source: Investing
