Investors flock to US equity funds on new Treasury pick
U.S. equity funds experienced a significant influx of cash, with investors injecting $12.78 billion in the week ending November 27. This surge in net purchases marks a considerable increase from the previous week’s $3.03 billion, according to data from LSEG Lipper. The boost in investor confidence is attributed to the recent appointment of Scott Bessent as the U.S. Treasury Secretary and a dip in Treasury yields, which has lessened worries about the future of growth stocks.
The announcement of Bessent, known for his fiscal conservatism, as part of the incoming Trump administration last week, has raised market expectations that the U.S. will maintain control over its debt levels during Trump’s second term. This appointment coincided with a notable rise in investments across various segments of the equity market.
Large-cap and small-cap funds drew significant attention, with inflows of $5.27 billion and $3.11 billion, respectively. Contrarily, multi-cap and mid-cap funds did not fare as well, witnessing net outflows of $419 million and $137 million.
Sector-specific U.S. funds also saw a high demand, with a net total of approximately $4.72 billion being invested. Financial, consumer discretionary, and technology sectors were the top beneficiaries, attracting net purchases of $2.08 billion, $990 million, and $962 million, respectively.
The appeal of U.S. bond funds continued unabated for the 26th consecutive week, securing $6.92 billion in net inflows. Investors showed a sustained interest in general domestic taxable fixed income funds, marking the 15th straight week of net purchases, totaling $3.01 billion. Additionally, U.S. short-to-intermediate investment-grade funds and mortgage funds attracted $1.53 billion and $1.48 billion in net inflows, respectively.
Despite the uptick in various fund categories, U.S. money market funds experienced net sales of around $2.37 billion, following a substantial $26.82 billion net outflow the week prior.
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