US equity funds attract inflows for third week in a row

March 15 – US equity funds drew inflows for a third consecutive week in the seven days to March 13, with investors optimistic about a rally on Wall Street and clinging to hopes of rate cuts this year, even as inflation proves stubborn.

According to data from the London Stock Exchange Group (LSEG), investors purchased USD 4.93 billion of US equity funds, the largest net weekly purchase since Feb 14.

Investor confidence has been bolstered by Wall Street’s record-breaking rally this year and recent remarks from Federal Reserve Chair Jerome Powell suggesting the central bank is close to being assured that inflation has eased enough to start reducing interest rates.

The S&P 500 touched a record high of 5189.26 last week and has gained about 8% so far this year.

Investors purchased US large-, small- and multi-cap funds worth a net USD 2.88 billion, USD 1.8 billion, and USD 771 million, respectively. However, mid-cap funds saw USD 584 million in net selling.

Tech and financials attracted the biggest inflows at a net USD 554 million and USD 389 million, respectively. Consumer discretionary witnessed a net USD 889 million exit.

Inflows to US bond funds slowed sharply to a net USD 3.81 billion from USD 10.54 billion in the prior week.

Demand for US general domestic taxable fixed income cooled to a net USD 1.76 billion from USD 4.65 billion, and for short/intermediate investment-grade funds to USD 1.64 billion from USD 4.21 billion.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kirsten Donovan)