US equity funds gain weekly inflows amid renewed hopes of rate cut

By Thomson Reuters May 10, 2024 | 9:14 AM

(Reuters) – U.S. equity funds registered their first weekly inflow in six weeks in the seven days to May 8 thanks to a softer than anticipated payrolls report that revived hopes that the Federal Reserve would trim interest rates this year.

Investors acquired a net $1.14 billion worth of U.S. equity funds during the week, marking their first weekly net purchase since March 27, data from LSEG showed.

Last week, Labor Department data showed U.S. job growth slowed more than expected in April, renewing hopes of a Fed rate cut later in the year in a reversal of expectations of delays due to persistent inflation.

By segment, U.S. small cap funds received a robust $2.14 billion, although after three straight weeks of outflows.

Large cap funds also secured $757 million in inflows, but mid-, and multi-cap funds faced outgo of $1.04 billion and $484 million, respectively.

Bucking the trend, U.S. sectoral funds saw $1.08 billion worth of outflows during the week, with investors offloading real estate and technology sector funds of $709 million and $458 million, respectively.

U.S. bond funds saw net purchases of $8.16 billion, the largest amount in a week since March 6.

U.S. general domestic taxable fixed income, and loan participation funds led the way, receiving a massive $2.61 billion and $2.04 billion, respectively.

Short/intermediate government & treasury, and municipal debt funds also drew notable inflows, worth about $1.38 billion and $1.05 billion, respectively.

Money market funds, meanwhile, saw $24.19 billion worth of net purchases, the third weekly inflow in a row.

(Reporting by Gaurav Dogra in Bengaluru; Editing by Toby Chopra)