U.S. equity funds witnessed a second straight week of outflows as investors turned cautious ahead of earnings from major technology companies and a renewed rise in oil prices, according to Reuters, citing LSEG Lipper data.
Investors withdrew a net $7.34 billion from U.S. equity funds in the week ended July 22, significantly higher than the $4.18 billion of net outflows recorded in the previous week.
The cautious mood followed disappointing quarterly results from Alphabet and Tesla, which reinforced concerns over the mounting costs of artificial intelligence investments, the sustainability of earnings growth, and elevated cash burn. Investor attention is now shifting to earnings from Microsoft, Amazon and Meta Platforms, which are scheduled to report next week, Reuters reported.
Among equity fund categories, U.S. growth funds registered the biggest selling pressure, with net outflows of $8.55 billion, the highest in three weeks. Value funds also saw investors pull out $1.39 billion, snapping a three-week streak of inflows.
Despite the broader risk-off sentiment, investors continued to add money to sector-specific funds for a fourth consecutive week. These funds attracted $2.46 billion in net inflows, led by financial sector funds with $1.39 billion, followed by healthcare funds at $1.35 billion and technology funds at $1.17 billion, according to Reuters.
U.S. bond funds, meanwhile, posted $2.36 billion in net outflows, ending a 13-week run of inflows.
Within fixed income, short-to-intermediate investment-grade bond funds recorded their first weekly outflow since April 15, with investors pulling $7.29 billion. In contrast, short-to-intermediate government and Treasury funds attracted $1.32 billion, while general domestic taxable fixed-income funds received $961 million in fresh investments.
Money market funds also remained under pressure, registering $25.17 billion in net outflows during the week after seeing roughly $67.16 billion in withdrawals in the previous week, Reuters reported.
