US equity funds post first inflow in five weeks on renewed AI optimism

Sept 25 (Reuters) – US equity funds recorded their first inflows in five weeks in the week ended September 25, buoyed by strong demand for AI applications and data and oil prices’ retreat from recent highs.

Investors purchased US equity funds of a net $37.6 billion in their largest weekly net purchase since June 17, LSEG Lipper data showed.

Funds investing in large-cap technology companies attracted strong demand, driven by a broader tech rally and robust consumer adoption of Meta’s Muse agent, which topped US app-download rankings.

However, a surge in 30-year Treasury yields to a 22-year high of 5.5016% on Thursday, as expectations mounted of further Federal Reserve policy tightening, tempered investors’ risk appetite.

US large-cap equity funds received $36.62 billion, the largest weekly net inflow since June 24. Multi-cap funds also drew $395 million inflows but mid-cap and small-cap funds had outflows of $372 million and $1.02 billion, respectively.

Among US sectoral funds, investors poured $4.89 billion into technology funds, the largest weekly inflow since July 29. They also purchased $515 million in consumer discretionary funds, while withdrawing $2.53 billion from financial sector funds.

Meanwhile, US bond fund inflows jumped to $5.93 billion during the week, from roughly $562 million the previous week.

Investors purchased $4.15 billion worth of general domestic taxable fixed-income funds — the largest weekly net buying since June 3.

Short-to-intermediate government and Treasury funds, short-to-intermediate investment-grade funds, and loan participation funds also recorded notable inflows of $2.15 billion, $1.63 billion, and $1.31 billion, respectively.

At the same time, money market funds attracted about $11 billion in net investments, ending a two-week outflow streak.

(Reporting by Gaurav Dogra; editing by Barbara Lewis)