(Reuters) - U.S. equity funds attracted big inflows in the seven days to July 17, driven by expectations of a U.S. interest rate cut amid cooling consumer prices and robust corporate earnings.
According to LSEG data, investors pumped $21.7 billion into U.S. equity funds during the week, the largest weekly net inflow since February 2021.
Earlier this week, the S&P 500 and the Dow Jones Industrial Average reached record highs following a weaker U.S. consumer price report the previous week, which fuelled speculation of a Federal Reserve rate cut. However, a sell-off in the chip sector and a rotation by investors away from mega-cap growth stocks drove the market lower on Thursday.
Meanwhile, upbeat results from insurer UnitedHealth Group (NYSE:UNH), and major banks including Bank of America, Goldman Sachs and Citigroup, also boosted inflows into equity funds during the week.
U.S. small-cap funds saw a significant surge in demand as they received $8.67 billion, the largest weekly inflow since at least October 2020.
Large-cap and multi-cap funds garnered $10.34 billion and $509 million of inflows, respectively, while mid-cap funds saw $1.22 million of outflows.
Among sectors, finance, industry and technology were popular as investors pumped $1.85 billion, $1.59 billion and $880 million into these funds, respectively.
U.S. bond funds, meanwhile, attracted $10.4 billion of net investments, the seventh weekly inflow in a row.
General domestic taxable fixed income funds received $3.44 billion, extending inflows into a fourth week. Loan participation and short/intermediate investment-grade funds also saw $1.28 billion and $1.15 billion of net purchases, respectively.
Money market funds, meanwhile, received $1.63 billion, the smallest inflow in three weeks.