Cautious optimism drives inflows to US equity funds amid positive growth outlook

June 30 (Reuters) – US equity funds attracted inflows during the week ending June 28, buoyed by positive growth expectations as robust economic indicators eased concerns about higher borrowing costs.

Investors purchased US equity funds of a net USD 2.1 billion after disposing of about USD 16.5 billion worth of funds in the previous week, data from Refinitiv Lipper showed.

Investor sentiment improved as reports revealed an increase in new orders for key US-manufactured capital goods, a rise in sales of new single-family homes in May, and a surge in US consumer confidence to a near 1-1/2 year high in June.

Consequently, US growth funds witnessed inflows of USD 1.1 billion, rebounding from the USD 3.1 billion outflows reported the previous week. Additionally, value funds attracted USD 428 million in investments.

Breaking down the data by size, US large-cap, multi-cap, and small-cap equity funds experienced net inflows of USD 6.1 billion, USD 1 billion, and USD 121 million, respectively. However, mid-cap funds faced outflows of USD 536 million.

On the sector front, US sectoral funds encountered net outflows of USD 1.47 billion, with materials and consumer staples witnessing USD 518 million and USD 326 million in net selling, respectively.

In contrast, US bond funds registered their first weekly outflow in three weeks, with net selling amounting to USD 2.37 billion. Specifically, US taxable bond funds saw outflows of USD 2.19 billion, while municipal bond funds recorded net selling of USD 289 million.

US short/intermediate government & treasury and inflation-protected funds experienced net outflows of USD 1.53 billion and USD 262 million, respectively. However, short/intermediate investment-grade funds attracted inflows worth USD 472 million.

Meanwhile, US money market funds sustained outflows for a third consecutive week, with withdrawals totaling USD 6.48 billion.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathyin Bengaluru; Editing by Chizu Nomiyama)