© Reuters. FILE PHOTO: A street sign, Wall Street, is seen outside New York Stock Exchange (NYSE) in New York City, New York, U.S., January 3, 2019. REUTERS/Shannon Stapleton/File Photo
(Reuters) – U.S. investors ramped up their selling of equity funds in the week to Jan. 26, hit by a selloff in tech stocks, and the rising geopolitical tensions between Russia and Ukraine.
According to Refinitiv data, investors offloaded U.S. equity funds worth $9.42 billion in the week – more than twice the amount it offloaded the previous week. (Graphic: Fund flows: US equities bonds and money market funds, https://fingfx.thomsonreuters.com/gfx/mkt/egvbklymapq/Fund%20flows%20US%20equities%20bonds%20and%20money%20market%20funds.jpg)
The S&P 500 slumped during the week, as a selloff in technology stocks ahead of the Federal Reserve’s policy meeting overshadowed upbeat results from blue-chip companies including IBM (NYSE:IBM) and 3M.
In its latest policy update on Wednesday, the Fed indicated it was likely to raise rates in March, as widely expected, and reaffirmed plans to end its pandemic-era bond purchases that month before launching a significant reduction in its asset holdings.
U.S. growth funds witnessed outflows of $11.75 billion, the most in seven weeks, while investors poured $465 million into value funds. (Graphic: Fund flows: US growth and value funds, https://fingfx.thomsonreuters.com/gfx/mkt/xmvjojklepr/Fund%20flows%20US%20growth%20and%20value%20funds.jpg)
Among sector funds, industrials, real estate, and technology funds posted outflows of over $500 million each. On the other hand, financials and utilities sector funds received inflows of $450 million and $407 million respectively. (Graphic: Fund flows: US equity sector funds, https://fingfx.thomsonreuters.com/gfx/mkt/dwpkrjdakvm/Fund%20flows%20US%20equity%20sector%20funds.jpg)
Meanwhile, U.S. bond funds saw net selling of $7.04 billion, the biggest in six weeks.
Investors sold U.S. municipal bond funds worth $1.61 billion, which was the biggest outflow since April 2020, while U.S. taxable bond funds posted outflows of $5.38 billion. However, U.S. general domestic taxable fixed income funds and loan participation funds obtained $2.89 billion and $2 billion. (Graphic: Fund flows: US bond funds, https://fingfx.thomsonreuters.com/gfx/mkt/myvmnjogqpr/Fund%20flows%20US%20bond%20funds.jpg)
U.S. money market funds received $25.46 billion in net buying, after three consecutive weeks of outflows.