US equity funds see outflows on tech selloff, trade war worries

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(Reuters) – U.S. equity funds witnessed the largest weekly outflow in four weeks in the week to March 5, driven by a tech sector selloff and escalating trade war fears after President Donald Trump imposed steep tariffs on imports from Canada, Mexico, and China.

With risk appetite subdued, investors divested U.S. equity funds of a net $9.54 billion during the week, in their largest weekly net sales since $10.71 billion worth of net withdrawals a month ago.

U.S. small-cap funds experienced the largest weekly outflow since December 18, with net sales totaling $3.48 billion. Mid-cap funds also saw significant outflows, amounting to $2.06 billion. In contrast, large-cap funds attracted net inflows of $2.93 billion.

Sectoral funds faced heavy selling, with net outflows reaching approximately $4.48 billion, including $1.9 billion from technology, $1.13 billion from industrials, and $788 million from financial sectors.

Relatively safer money market funds were meanwhile in demand for the second successive week, with a net $46.77 billion in purchases during the week.

Fund investors favored U.S. debt securities for a ninth consecutive week, as they snapped up a net $5.4 billion worth of bond funds.

Investors added U.S. short-to-intermediate government and treasury funds worth a net $1.8 billion, the most for a week since January 15.

They also racked up short-to-intermediate investment-grade funds, general domestic taxable fixed income funds and municipal debt funds worth $2.17 billion, $994 million and $875 million, respectively.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by William Maclean)