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US equity funds see third weekly inflow on rate optimism

2023-11-24 18:46
U.S. equity funds continued to accumulate inflows in the week to Nov. 22 as investor sentiment was buoyed
US equity funds see third weekly inflow on rate optimism

U.S. equity funds continued to accumulate inflows in the week to Nov. 22 as investor sentiment was buoyed by expectations of a pause in U.S. interest rate hikes, with a concurrent decline in Treasury yields further fuelling risk appetite. LSEG data showed that U.S. equity funds received a net $6.27 billion, the third weekly inflow in a row.

The 10-year U.S. Treasury yield dropped about 19 basis points last week, boosting demand in sectors such as technology. The yield hit a two-month low of 4.416% on Wednesday. Technology sector funds received $2.29 billion during the week, the biggest inflow since mid-December 2021. Investors, however, pulled out $382 million and $339 million, respectively from utilities and healthcare sectors.

By segment, U.S. large-cap funds attracted $4.89 billion in inflows, continuing a five-week trend of net buying. Small- and multi-cap funds also saw inflows of about $1.45 billion and $1.43 billion, respectively, while mid-cap funds faced $824 million in outflows. Meanwhile, U.S. bond funds observed a net withdrawal of about $266 million, breaking a two-week streak of net purchases. U.S. short/intermediate government & Treasury funds experienced substantial withdrawals of $2.8 billion, the largest since Dec. 7, 2022. U.S. emerging markets debt funds and high-yield bond funds, however, received about $605 million and $319 million, respectively in inflows.

U.S. investors also poured about $19.38 billion into money market funds, extending inflows into a fifth consecutive week.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Susan Fenton)