US Equity Funds Experience Significant Outflows Amid Growth Concerns – Reuters

U.S. equity funds recorded their largest weekly outflow in 12 weeks by September 4, as investor concerns about the economic outlook increased ahead of key labor market data.

According to data from LSEG, investors pulled a net $11.73 billion from U.S. equity funds during this week, marking the fourth outflow in the last five weeks. A disappointing U.S. manufacturing report released on Tuesday heightened worries about economic growth, particularly with a significant non-farm payrolls report set to be released at 8:30 a.m. ET. This report is anticipated to provide crucial insights into the economic climate and could influence the possibility of an interest rate cut this month.

In terms of specific fund categories, U.S. large-cap funds saw a net outflow of $4.28 billion, the largest in three weeks. Small-cap, mid-cap, and multi-cap funds also experienced outflows of $1.77 billion, $1.34 billion, and $667 million, respectively. The technology sector suffered around $879 million in net sales, representing its biggest weekly outflow in six weeks. Conversely, investors continued to show interest in financial sector funds, purchasing approximately $418 million, marking the fourth consecutive week of inflows for this sector.

In a shift towards safety, investors directed a net $45.81 billion into U.S. money market funds, continuing a trend of five weeks of increased investments. Additionally, U.S. bond funds attracted inflows for the 14th week in a row, totaling $2.23 billion on a net basis.

Specific performances within the bond market saw substantial investment in short-to-intermediate investment-grade, general domestic taxable fixed income, and municipal debt funds, which garnered $3.28 billion, $2.03 billion, and $963 million, respectively. However, short-to-intermediate government and treasury funds experienced about $5.53 billion in net selling, reversing a $4.84 billion inflow from the previous week.