Investors reduced holdings in U.S. equity funds for the fifth consecutive week through September 25, driven by lingering concerns about the economy’s health and caution ahead of the U.S. presidential election.
According to LSEG data, investors divested a massive $22.43 billion worth of US equity funds during the week, which was their largest weekly net sales since December 2022.
Last week, weak U.S. consumer confidence heightened investor concerns about the labor market’s health, fuelling worries that the Fed’s unusual 50 basis-point rate cut was in response to a significant economic slowdown.
By segment, U.S. large-cap equity funds experienced substantial outflows of $15.23 billion, the largest weekly net selling since December 2022. Additionally, investors withdrew a net $2.34 billion, $2.08 billion, and $998 million from small-cap, multi-cap, and mid-cap funds respectively.
Among sectoral funds, investors withdrew $539 million from the consumer staples sector, reversing three consecutive weeks of net purchases. Real estate, industrials, and financial sectors each saw approximately $400 million in outflows during the week.
Meanwhile, U.S. bond funds attracted $6 billion in net purchases, continuing a streak with their 17th consecutive weekly inflow.
Leading the pack, US short-to-intermediate government and treasury funds recorded about $3.13 billion in inflows, the highest in four weeks. Additionally, US general domestic taxable and short-to-intermediate investment-grade funds also saw significant net purchases, totaling $2.21 billion and $1.17 billion respectively.
Meanwhile, U.S. investors acquired money market funds of a net $112.57 billion, which was their largest weekly net purchase since at least December 2020.
(Source: Reuters)
Zabih Ullah is a seasoned finance writer with more than ten years of experience. He is highly skilled at analyzing market trends, decoding economic data, and providing insightful commentary on various financial topics. Driven by his curiosity, Zabih stays updated with the latest developments in the finance industry, ensuring that his readers receive timely and relevant news and analysis.
