Key insights
- US equity funds experienced significant outflows ($24.78B) as rate cut expectations diminished due to inflation and the Fed's cautious approach. Large-cap funds were hit hardest. Bond funds saw inflows, particularly in short-to-intermediate government and investment-grade, while money market funds continued to attract safe-haven flows. This suggests a shift away from equities towards fixed income and cash due to increased uncertainty.
March 20 (Reuters) - U.S. equity funds witnessed the largest weekly net sales in nearly 2-1/2 months in the week to March 18 as expectations of higher oil prices, a hotter-than-expected inflation reading and the Federal Reserve’s cautious stance dampened hopes for rate cuts this year.
Investors shed U.S. equity funds of a net $24.78 billion in their largest weekly net sales since $25.89 billion divestments in the week to January 7, LSEG Lipper data showed.
U.S. large-cap funds lost a net $36.11 billion as weekly outflows surged to the highest since mid-September 2025. Mid-cap funds also faced a net $606 million outflow, but small-cap funds saw roughly $1.75 billion worth of net purchases.
Sectoral funds saw a net $793 million in inflows following a week of outflows as investors pumped roughly $1.55 billion - the most in six weeks - into the industrial sector funds.
Weekly net investments in bond funds, meanwhile, surged to a five-week high as investors poured roughly $11.53 billion into these funds.
Short-to-intermediate government and treasury funds and short-to-intermediate investment-grade funds saw a significant weekly net purchase of $5.12 billion and $3.9 billion, respectively.
Money market funds, meanwhile, saw a net $32.73 billion weekly investment as safe-haven demand extended into a fifth successive week.