Jan 3 (Reuters) - Inflows into U.S. equity funds fell

sharply in the week through Jan. 1 hit by rising Treasury yields

and year-end profit- taking, along with concerns about a slower

pace of Federal Reserve rate reductions this year.

Data from LSEG Lipper indicated that U.S. equity funds

received just $490 million worth of investments during the week,

significantly smaller than the $20.46 billion in net purchases

in the week before.

Last week, concerns over the outlook for mega-cap technology

stocks increased as the U.S. 10-year Treasury yield climbed to

4.641%, its highest since May 2.

Despite impressive annual gains in 2024, with the Nasdaq

Composite, S&P 500, and Dow Jones Industrial Average rising

28.64%, 23.31%, and 12.88% respectively, all three indexes fell

by over 1% this week as investors across sectors, took profits.

Investors bought U.S. large-cap and multi-cap funds of $5.43

billion and $844 million, respectively, but in contrast, pulled

$1.67 billion and $485 million, respectively out of small-cap

and mid-cap funds.

Sectoral funds witnessed a fifth successive week of outflow,

valued at a net 2.55 billion. Industrials, tech and healthcare

sectors, with $519 million, $385 million and $358 million in net

selling, led outflows.

Concurrently, investors added a robust $54.59 billion worth

of safer money market funds, the largest weekly net purchase in

four weeks.

U.S. bond funds were under selling pressure for a third

consecutive week, with investors divesting a net $493 million

worth of these funds.

U.S. short-to-intermediate government & treasury funds

segment, however, bucked the trend as it gained a net $1.35

billion worth of inflows, the highest in three months.