U.S. equity funds recorded significant net inflows of $28.18 billion for the week ending January 14, according to LSEG Lipper data. This marks the largest weekly net purchase since October 1 and fully reverses the $26.02 billion in net sales reported the previous week.
Investors appeared to set aside concerns regarding geopolitical tensions and Federal Reserve independence, focusing instead on upbeat expectations ahead of the fourth-quarter earnings season. Easing inflation pressures, which have bolstered bets on potential interest rate cuts later this year, also contributed to improved sentiment.
LSEG data indicates that U.S. large- and mid-cap companies are forecast to report a 10.81% profit growth for the last quarter, with the technology sector leading at a projected 19.32% increase.
Breaking down the equity inflows, U.S. large-cap funds drew a net $14.04 billion, recovering from approximately $31.75 billion in net sales the week before. Small-cap funds attracted $579 million in net investments, while mid-cap funds experienced outflows of $1.91 billion.
Among sector-specific funds, industrial, technology, and consumer staples sectors saw net investments of $1.69 billion, $1.04 billion, and $984 million, respectively.
Meanwhile, bond funds witnessed $10.12 billion in inflows, the largest weekly amount 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 contrast, investors divested $75.72 billion from money market funds, following a combined net purchase of roughly $134.94 billion over the preceding two weeks.