Investing.com -- U.S. equity funds experienced the highest net outflows in three months in the week leading up to March 19, driven by concerns about U.S. tariff policies and caution ahead of a monetary policy decision from the Federal Reserve.
LSEG Lipper data reveals that investors withdrew $33.53 billion from U.S. equity funds during the week, marking the largest weekly net withdrawal since December 18. This contrasts with the $4.84 billion in net purchases made the week before.
The Federal Reserve left its benchmark overnight interest rate unchanged on Wednesday, while indicating that two quarter-point cuts were likely later this year. The Fed also forecasted slower economic growth and higher inflation.
Large-cap U.S. funds experienced $27.38 billion of net selling, ending a three-week buying streak. Small-cap, multi-cap, and mid-cap funds also saw outflows, with $3.48 billion, $1.42 billion, and $1.09 billion being withdrawn, respectively.
Selling pressure in sectoral funds eased to a three-week low, with investors withdrawing a net $1.35 billion. This is in contrast to the combined net sales of $7.54 billion over the previous two weeks. Tech, communication services, and healthcare funds led the sectoral outflows, with net sales of $451 million, $230 million, and $227 million, respectively.
U.S. bond funds saw their first weekly outflow in 11 weeks, totaling $513 million. Investors divested from general domestic taxable fixed income funds and loan participation funds, withdrawing $1.56 billion and $1.62 billion, respectively.
On the other hand, short-to-intermediate government and treasury funds attracted a net $2.89 billion, marking the 13th consecutive week of inflows.
Lastly, U.S. investors withdrew $28.83 billion from money market funds, following $13.43 billion in net sales the previous week.
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