U.S. Equity Funds See Inflows After Four Weeks

(Reuters) – U.S. equity funds attracted inflows for the first time in four weeks during the week ending Jan. 29. This was driven by optimism over potential interest rate cuts following remarks from President Donald Trump, along with a rebound in technology shares after prior losses.

According to LSEG Lipper data, U.S. equity funds saw a net inflow of $5.58 billion, the largest in five weeks, after three consecutive weeks of outflows.

During the World Economic Forum, President Trump indicated a desire to reduce global oil prices, lower interest rates, and cut taxes, while the Federal Reserve chose to maintain steady rates this week.

Investors invested a net $2.12 billion into U.S. technology sector funds, the highest weekly inflow since November 2023. Additionally, financials and industrials sector funds garnered $1.5 billion and $717 million, respectively.

U.S. large-cap and small-cap equity funds attracted net inflows of $1.13 billion and $1.51 billion, while the mid-cap and multi-cap segments faced outflows of $1.1 billion and $947 million, respectively.

In the debt market, investors channeled $8.38 billion into U.S. bond funds, marking a fourth consecutive week of net purchases. They specifically allocated $3.46 billion to general domestic taxable fixed income funds. Loan participation funds and short-to-intermediate investment-grade funds also saw inflows of $1.5 billion and $1.17 billion, respectively.

Conversely, U.S. investors divested $35.05 billion from money market funds, reflecting the second week of net sales in six weeks.