US equity funds rebound with net inflows amid market rally

(Reuters) – U.S. equity funds attracted net inflows in the week through Dec. 13 amid a rally on Wall Street despite caution ahead of the Federal Reserve’s upcoming monetary policy announcement.

Investors accumulated a net $1.98 billion worth of U.S. equity funds during the week, resuming inflows after two successive weeks of net selling.

The S&P 500 experienced a breakout last Friday, reaching a 20-month closing high of 4604.37 following a robust U.S. jobs report that bolstered optimism for the economy’s soft landing.

The index further climbed to a 23-month high of 4738.57 this week as the Fed kept interest rates unchanged and signalled a potential end to its stringent monetary policy.

During the week, U.S. equity value funds attracted about $2 billion, marking a third straight week of net buying. Meanwhile, growth funds experienced $376 million in net selling, the smallest outflow in four weeks.

Tech and consumer discretionary sector funds were particularly sought after, with net inflows of $1.88 billion and $971 million, respectively. Conversely, health care and metals & mining sectors faced net outflows of $681 million and $645 million respectively.

Meanwhile, investors sold a net $4.41 billion worth of U.S. bond funds, extending net selling into a third successive week.

Investors withdrew $3.68 billion out of U.S. taxable bond funds and $524 million out of municipal bond funds.

High yield funds still remained in demand for a sixth consecutive week, drawing a net $763 million worth of inflows. Investors also poured $1.15 billion into general domestic taxable fixed income funds.

U.S. money market funds, on the other hand, recorded their first weekly outflow in eight weeks, totalling $16.68 billion in net selling.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Susan Fenton)