US equity funds’ weekly outflows surge to a three-month high on tariff concerns

US equity funds saw the largest net outflows in three months in the week through March 19 on worries about the impact of US tariff policies and caution ahead of a monetary policy decision from the Federal Reserve.

According to LSEG Lipper data, investors pulled USD 33.53 billion from US equity funds during the week in their largest weekly net withdrawal since December 18, contrasting with USD 4.84 billion in net purchases the week before.

The Fed kept its benchmark overnight interest rate unchanged on Wednesday, and indicated that two quarter-point cuts were likely later this year, while also forecasting slower economic growth and higher inflation.

US large-cap funds saw USD 27.38 billion of net selling as investors ended a three-week buying streak.

Small-cap, multi-cap, and mid-cap funds also saw outflows of USD 3.48 billion, USD 1.42 billion and USD 1.09 billion, respectively.

Selling pressure in sectoral funds, however, eased to the lowest in three weeks as investors pulled out a net USD 1.35 billion, compared with combined net sales of USD 7.54 billion in the prior two weeks.

Tech, communication services, and healthcare funds led sectoral outflows, with net sales of USD 451 million, USD 230 million, and USD 227 million, respectively.

US bond funds, meanwhile, saw their first weekly outflow in 11 weeks, amounting to USD 513 million.

Investors divested general domestic taxable fixed income funds and loan participation funds worth USD 1.56 billion and USD 1.62 billion, respectively.

In contrast, short-to-intermediate government and treasury funds attracted a net USD 2.89 billion, the 13th weekly inflow in a row.

US investors, meanwhile, ditched USD 28.83 billion worth of money market funds after USD 13.43 billion in net sales a week ago.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru. Editing by Mark Potter)