(Reuters) – U.S. equity funds saw heavy outflows in the seven days to Aug. 9 amid investor caution ahead of the U.S. inflation data and concerns over credit rating downgrades in the banking sector.
According to Refinitiv Lipper data, investors withdrew about $14.96 billion from U.S. equity funds during the week, their biggest week of net selling since June 21.
Wall Street stocks posted big losses last week, with the S&P 500 and the Nasdaq registering their biggest weekly declines since March as investors took profits after five months of gains.
Also tempering investor appetite, credit rating agency Moody’s downgraded 10 small- to mid-sized U.S. lenders on Monday and placed another six banks on review for potential downgrades.
Investors sold out of U.S. large-, mid-, and multi-cap funds to the tune of $14.95 billion, $543 million and $261 million, respectively, but small-cap funds still drew about $748 million in inflows.
By sector, materials, financials and tech saw net sales of $891 million, $554 million and $524 million, respectively. Meanwhile, healthcare funds received $1.39 billion, the most in a week since March 2022.
Meanwhile, U.S. money market funds and government bond funds attracted $40.88 billion and $4.48 billion, respectively, as investors hunted for safety.
On a combined net basis, U.S. bond funds received $3.99 billion in inflows, compared with about $938 million of outflow in the previous week.
U.S. general domestic taxable fixed income and short/intermediate investment-grade funds received about $800 million each in inflows. On the other hand, high yield and loan participation funds saw net sales of $565 million and $419 million, respectively.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathyin Bengaluru; Editing by Mark Potter)