US equity funds see major outflows on growth concerns

US equity funds experienced their largest weekly outflow in 12 weeks by Sept. 4, driven by heightened investor anxiety about the economic outlook as they awaited crucial labor market data.

According to LSEG data, investors disposed of a net USD 11.73 billion worth of US equity funds during the week, registering a fourth weekly outflow in five weeks.

A lackluster US manufacturing report on Tuesday reignited investor concerns about economic growth, ahead of the crucial non-farm payrolls report due at 8:30 a.m. ET (1230 GMT). This upcoming report could provide further insights into the economic situation and influence the potential magnitude of an interest rate cut this month.

By segment, US large-cap funds observed a weekly net sale of USD 4.28 billion, the biggest in three weeks. Small-cap, mid-cap and multi-cap funds also posted outflows, valued at USD 1.77 billion, USD 1.34 billion and USD 667 million, respectively.

The technology sector faced about USD 879 million worth of net sales, the biggest weekly outflow in six weeks. Investors, meanwhile, bought financial sector funds for the fourth successive week, worth about USD 418 million.

Investors, meanwhile, funneled a net USD 45.81 billion worth of investments into the safety of US money market funds, extending their purchases into a fifth consecutive week.

US bond funds, meanwhile, attracted inflows for the 14th week in a row, recorded at USD 2.23 billion on a net basis.

US short-to-intermediate investment-grade, general domestic taxable fixed income, and municipal debt funds saw significant purchases, worth about USD 3.28 billion, USD 2.03 billion, and USD 963 million, respectively.

Short-to-intermediate government & treasury funds, meanwhile, witnessed about USD 5.53 billion worth of net selling, reversing a net USD 4.84 billion worth of inflow in the prior week.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by David Evans)