U.S. equity funds observed heavy outflows in the seven days through June 12 as some investors booked profits and exercised caution ahead of the Federal Reserve’s policy decision.
Investors ditched U.S. equity funds worth a net $21.93 billion during the week in their largest weekly net disposal since mid-December 2022, data from LSEG showed.
Despite the Fed leaving interest rates unchanged and tempering expectations for rate cuts this year, the S&P 500 (.SPX), and the Nasdaq Composite (.IXIC),both reached record closing highs for the third consecutive session, buoyed by data suggesting inflation is cooling.
Large-cap equity funds saw the most significant outflow, with $14.94 billion leaving these funds, marking the largest weekly outflow since December 21, 2022. Outflows also hit multi-cap, mid-cap, and small-cap funds, which saw $2.37 billion, $1.43 billion, and $816 million in net withdrawals, respectively.
Conversely, investors sought safety in U.S. bond funds and money market funds, adding $1.72 billion and $20 billion, respectively. U.S. sectoral equity funds, however, enjoyed their second consecutive week of inflows, amassing about $1.85 billion, buoyed by $1.8 billion in net purchases in the technology sector.
Additionally, U.S. bond funds attracted a net $4.82 billion, marking their second consecutive week of inflows. U.S. general domestic taxable fixed income funds received a robust $2.44 billion, the highest in five weeks, while short/intermediate investment-grade and loan participation funds garnered $841 million and $546 million in inflows, respectively.
