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US equity funds see sharp outflows in the week to Feb 5
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US equity funds see sharp outflows in the week to Feb 5
Feb 7, 2025 2:44 AM

(Reuters) - U.S. equity funds witnessed their fourth weekly outflow in five weeks in the week to Feb. 5, driven by heightened geopolitical risks from President Donald Trump's new trade tariffs on China and investor wariness over weaker-than-expected earnings from key technology companies.

Investors divested U.S. equity funds worth a net $10.71 billion in their largest weekly sales since Dec. 18, 2024, data from LSEG Lipper showed.

Disappointing cloud revenue growth at Alphabet and its hefty investments in artificial intelligence, along with weaker data center sales forecasts from Advanced Micro Devices, compounded investor concerns about substantial artificial intelligence investments.

U.S. investors pulled a massive $6.44 billion out of large-cap equity funds, the most for a week since Dec. 18. They also ditched small-cap, multi-cap and mid-cap funds worth $2.02 billion, $1.12 billion and $335 million, respectively.

Sectoral funds, however, attracted $1.2 billion, the third weekly inflow in a row, with financials and consumer discretionary drawing $1.01 billion and $907 million, respectively, leading the way.

Investors, meanwhile, acquired safer money market funds worth a net $39.61 billion following $35.13 billion worth of net sales in the prior week.

Bond funds remained popular for the fifth week in a row as they attracted a sharp $9.22 billion worth of inflows during the week.

U.S. general domestic taxable fixed income funds, short-intermediate investment-grade funds and loan participation funds were popular as they gained a significant $4.64 billion, $3.31 billion and $2.93 billion, respectively, in inflows.

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