Markets showed a cooling appetite for equities this week as investors weighed selling pressure in software names, Reuters reported, citing LSEG Lipper data. 'US equity fund inflows ease as tech selloff weighs,' Reuters said as investors bought $5.58 billion of US equity funds, roughly a 48% decline from the prior week's $10.82 billion net inflows.
The pullback in software shares followed AI developer Anthropic launching a legal plug-in for its generative AI chatbot last Friday, an event that pushed concerns about disruption across the sector, Reuters said. Strong corporate results from Eli Lilly and Super Micro Computer provided some support for equity demand, but sector rotation left clear winners and losers in fund flows.
Fund-level detail showed US large-cap funds received $1.1 billion of net purchases, while mid-cap and small-cap funds saw outflows of $1.59 billion and $1.67 billion respectively, according to LSEG Lipper data reported by Reuters. By sector, investors added $2.11 billion to industrials and $1.44 billion to metals and mining, but pulled a sharp $2.34 billion from the technology sector.
Bond And Money Market Flows Remain Strong
Fixed income and cash vehicles continued to attract large sums, Reuters reported that US bond funds recorded a fifth straight weekly inflow of $11.11 billion. Short-to-intermediate investment-grade funds accounted for $6.34 billion of net investments, the largest weekly amount since at least 2022, LSEG Lipper data showed.
Municipal debt funds drew $2.38 billion and inflation-protected funds attracted $1.34 billion, according to Reuters' summary of LSEG Lipper figures. At the same time, US money market funds experienced $83.09 billion of net purchases, the biggest weekly inflow since a $105.08 billion net purchase in the week to December 3, Reuters reported.
