U.S. investors continued their streak of net purchases in equity funds for the fifth consecutive week, lasting from March 21 to March 27, driven by expectations of three potential interest rate cuts this year.
However, their enthusiasm was tempered by caution ahead of an impending inflation report, which limited their buying activity.
During this period, investors added a net total of $2.6 billion to U.S. equity funds, marking the lowest weekly net buying since March 6, as per data from LSEG.
Meanwhile, the latest Personal Consumption Expenditures (PCE) data released on Friday revealed moderate price increases in February, reinforcing the belief that the Federal Reserve might opt for interest rate cuts in June.
Large-cap funds in the U.S. attracted significant attention, receiving $6.13 billion in inflows for the week following net purchases of $15.3 billion in the previous week.
Small-cap funds also saw positive inflows of $1.45 billion. However, multi- and mid-cap funds experienced outflows of $2.86 billion and $378 million, respectively.
Investor preferences were evident in their sector allocations, with net purchases of approximately $1 billion and $907 million in tech and industrial sector funds, respectively. Conversely, the healthcare sector witnessed net selling amounting to $802 million.
Turning to bond funds, U.S. markets observed net purchases of $3.47 billion, reversing the $1.47 billion in outflows recorded in the previous week. Notably, U.S. short/intermediate investment-grade funds attracted the largest inflow in three weeks, amounting to $1.88 billion.
Additionally, loan participation and general domestic taxable fixed-income funds secured inflows of $755 million and $506 million, respectively.
On the other hand, money market funds experienced net selling of $12.08 billion, marking the second consecutive weekly outflow.
