US equity funds see outflows on geopolitical worries

Jan 23 (Reuters) – U.S. equity funds faced outflows in the week through January 21 as investors reduced risk exposure on concerns about President Donald Trump’s tariff threats against European nations over Greenland.

Investors pulled a net $5.26 billion from U.S. equity funds, partly reversing the roughly $28.17 billion of net purchases made the previous week.

Trump stepped back from the tariff threats against eight European countries on Wednesday and ruled out seizing Greenland by force.

U.S. large-cap, small-cap and mid-cap funds recorded net outflows of $12.94 billion, $2.1 billion and $1.21 billion, respectively, in the latest week.

Sector funds, meanwhile, logged a net $3.3 billion in weekly inflows, led by financials, metals and mining, and healthcare funds, where investors bought a net $1.5 billion, $904 million and $615 million, respectively.

Weekly net investments in U.S. bond funds eased to a three-week low of $5.9 billion. Short-to-intermediate investment-grade funds saw stronger demand, drawing in a net $3.05 billion, a 44% jump from the $2.11 billion taken in the prior week.

General domestic taxable fixed-income funds, municipal debt funds, and short-to-intermediate government and Treasury funds attracted a net $1.1 billion, $994 million and $827 million, respectively.

Money market funds recorded a second straight week of outflows, with investors withdrawing a net $34.93 billion.

(Reporting by Gaurav Dogra. Editing by Mark Potter)