U.S. equity funds experienced outflows for the fourth consecutive week through May 7, largely due to ongoing uncertainties surrounding trade tariffs. Investors remained cautious, waiting for further developments in the U.S.-China trade talks.
During this period, investors pulled a net $16.22 billion from U.S. equity funds, marking the largest weekly outflow since March 19, according to data from LSEG Lipper.
Despite this, optimism grew following a U.S. trade deal with Britain on Thursday, which raised hopes for progress in tariff negotiations with other countries. President Donald Trump also hinted that productive talks with China could lead to a reduction in tariffs.
“We continue to view U.S. equities as attractive, with a year-end S&P 500 target of 5,800,” said Mark Haefele, Chief Investment Officer at UBS Global Wealth Management.
Large-cap and mid-cap equity funds saw significant outflows, with $13.6 billion and $1.12 billion withdrawn, respectively. On the other hand, outflows from U.S. small-cap equity funds eased to $917 million, the lowest in six weeks.
U.S. sectoral funds also faced a net $2.89 billion in sales. Investors pulled funds from financials, tech, and metals and mining sectors, withdrawing $1.18 billion, $507 million, and $420 million, respectively.
On a more positive note, investor sentiment toward U.S. fixed-income markets improved. Bond funds saw a net inflow of $3.53 billion, the largest in eight weeks. Short-to-intermediate government and treasury funds experienced a net purchase of $1.15 billion, reversing previous sales. Additionally, municipal debt funds attracted a net $1.06 billion in investments.
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