(Reuters) - U.S. equity funds drew inflows for a third consecutive week in the seven days to March 13, with investors optimistic about a rally on Wall Street and clinging to hopes of rate cuts this year, even as inflation proves stubborn.
According to data from the London Stock Exchange Group (LON:LSEG), investors purchased $4.93 billion of U.S. equity funds, the largest net weekly purchase since Feb 14.
Investor confidence has been bolstered by Wall Street's record-breaking rally this year and recent remarks from Federal Reserve Chair Jerome Powell suggesting the central bank is close to being assured that inflation has eased enough to start reducing interest rates.
The S&P 500 touched a record high of 5189.26 last week and has gained about 8% so far this year.
Investors purchased U.S. large-, small- and multi-cap funds worth a net $2.88 billion, $1.8 billion and $771 million, respectively. However, mid-cap funds saw $584 million of net selling.
Tech and financials attracted the biggest inflows at a net$554 million and $389 million, respectively. Consumer discretionary witnessed a net $889 million exit.
Inflows to U.S. bond funds slowed sharply to a net $3.81 billion from $10.54 billion in the prior week.
Demand for U.S. general domestic taxable fixed income cooled to a net $1.76 billion from $4.65 billion, and for short/intermediate investment-grade funds to $1.64 billion from $4.21 billion.
Money market funds attracted a net $24.07 billion in a third week of inflows.