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US equity funds see weekly outflows amid profit-taking, economic report caution

Published 12/01/2023, 07:24 AM
Updated 12/01/2023, 07:26 AM
© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) - U.S. equity funds witnessed outflows in the week to Nov. 29, as investors booked profits after a strong rally and were cautious ahead of some key economic reports and earnings results.

U.S. equity funds suffered about $3.31 billion worth of outflows during the week, the first weekly net selling since Nov. 1, LSEG data showed.

During the week, market participants were closely monitoring upcoming releases, including the Federal Reserve's "Beige Book" and October's personal consumption expenditure index data, seeking insights into the U.S. central bank's upcoming rate decisions.

U.S. consumer spending rose moderately in October, while the annual increase in inflation was the smallest in more than 2-1/2 years, signs of cooling demand that bolstered expectations the Fed's interest rate hiking campaign was over.

Analysts said investors booked profits during the week as benchmark equity indices — the Dow, S&P 500 and Nasdaq — all posted more than 8% gains in November, their best monthly performance since at least October 2022.

Investors withdrew $3.32 billion, $2.97 billion and $500 million, respectively, from multi-, small-, and mid-cap equity funds.

U.S. large-cap equity funds still received about $6.81 billion, their sixth straight weekly inflow.

The technology sector faced $2.19 billion worth of net selling after three consecutive weeks of purchases. Investors also pulled $526 million out of healthcare funds but poured $390 million into financials.

U.S. bond funds lost $1.77 billion during the week after about $262 million worth of net selling in the prior week.

U.S. short/intermediate government and treasury funds recorded a fourth successive weekly outflow, worth about $2.01 billion.

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Investors also shed $660 million of general domestic taxable fixed income funds but poured $381 million and $273 million, respectively, into mortgage and high yield funds.

U.S. money market funds received $68.28 billion in inflows, the biggest amount since March 22.

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