U.S. equity funds experienced inflows for the first time in three weeks during the seven days ending on February 19, supported by reduced concerns and robust fourth-quarter corporate earnings that boosted risk appetite.
According to LSEG Lipper data, investors netted $1.59 billion in U.S. equity funds that week, marking their second net purchase in the past seven weeks. The S&P 500 index reached a record high of 6147.45 on Wednesday, driven by an improved corporate earnings outlook and strong results from the majority of its constituents.
Approximately 76% of S&P 500 companies reported fourth-quarter earnings that exceeded expectations, as per LSEG data covering around 85% of the companies analyzed.
U.S. multi-cap equity funds attracted net purchases of $1.66 billion, representing the largest weekly inflow since November 20. Large-cap funds also saw a net increase of $877 million, while small- and mid-cap funds experienced net outflows of $1.62 billion and $718 million, respectively.
Sectoral funds faced outflows for the second consecutive week, with investors divesting $792 million and $593 million from consumer discretionary and healthcare funds, respectively.
Bond funds remained popular for the seventh straight week, with investors injecting a net of $8.62 billion. General domestic taxable fixed income funds recorded net purchases of $2.14 billion, marking the seventh consecutive weekly inflow.
Investors showed interest in short-to-intermediate government and treasury funds, short-to-intermediate investment-grade funds, and loan participation funds, which attracted a net of $1.77 billion, $1.68 billion, and $1.6 billion, respectively.
U.S. money market funds experienced net sales of $14.11 billion, marking the third weekly outflow in the past four weeks.