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Investors pull out of US equity funds for a second successive week
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Investors pull out of US equity funds for a second successive week
Feb 14, 2025 4:20 AM

(Reuters) - U.S. investors pulled out of equity funds for the second consecutive week through February 12, driven by rising inflation, weaker economic data and concerns over President Donald Trump's reciprocal tariffs, dampening risk appetite.

LSEG Lipper data showed that U.S. equity funds generated a net $2.25 billion in sales during the week as investors divested out of these funds for a fifth out of six weeks.

U.S. consumer prices in January saw their largest increase in nearly 1.5 years, reinforcing the Federal Reserve's stance of not rushing to cut interest rates again amidst growing economic uncertainty.

U.S. mid-cap funds suffered a net $1.14 billion worth of outflow, the biggest weekly net sales in four weeks. Investors also divested small-cap funds of $451 million, multi-cap funds of $10.65 million but purchased large-cap funds to the tune of $864 million on a net basis.

Meanwhile, U.S. sectoral equity funds saw a net $1.55 billion worth of sales, the first weekly outflow in four weeks. Investors divested consumer discretionary and healthcare funds worth a notable $965 million and $686 million, respectively.

Simultaneously, U.S. bond funds drew inflows for a sixth successive week, amounting to $7.45 billion on a net basis.

Short-to-intermediate investment grade funds received a hefty $3.54 billion following about $3.3 billion worth of net purchases in the prior week.

General domestic taxable fixed income funds, and short-to-intermediate government and treasury funds were also popular as they garnered inflows worth a net $1.84 billion and $1.5 billion, respectively.

Money market funds, meanwhile, saw a marginal $134 million worth of sales after a robust $39.06 billion worth of inflow, a week earlier.

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