Jan 16 (Reuters) – U.S. equity funds witnessed sharp inflows in the week to January 14 on upbeat earnings expectations ahead of the fourth quarter earnings season, with investors brushing off concerns around geopolitics and the Federal Reserve’s independence.
Easing inflation pressures, bolstering bets of interest rate cuts later this year, also boosted investor sentiment.
Investors bought U.S. equity funds amounting to a net $28.18 billion in their largest weekly net purchase since October 1, entirely reversing the $26.02 billion in net sales the prior week, LSEG Lipper data showed.
With the fourth-quarter earnings season in its early stage, LSEG data shows that U.S. large- and mid-cap companies are expected to report a 10.81% profit growth for the last quarter. The tech sector leads with a forecast 19.32% rise.
U.S. large-cap equity funds drew a net $14.04 billion weekly inflow after around $31.75 billion net sales in the previous week. Small-cap funds attracted $579 million in net investments while mid-cap funds faced outflows of a net $1.91 billion.
Among sectoral funds, industrial, tech and consumer staples sectors saw net investments to the tune of $1.69 billion, $1.04 billion and $984 million, respectively.
Bond funds, meanwhile, saw $10.12 billion worth of inflows, the largest amount for a week since October 8.
General domestic taxable fixed income funds, short-to-intermediate investment-grade funds and municipal debt funds led with net investments of $3.23 billion, $2.11 billion and $1.82 billion, respectively, in the most recent week.
Investors, meanwhile, divested $75.72 billion worth of money market funds after approximately a combined $134.94 billion net purchase in the previous two weeks.
(Reporting by Gaurav Dogra; editing by Mark Heinrich)
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