US equity funds’ weekly outflows surge to a three-month high on tariff concerns

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(Reuters) – U.S. equity funds saw the largest net outflows in three months in the week through March 19 on worries about the impact of U.S. tariff policies and caution ahead of a monetary policy decision from the Federal Reserve.

According to LSEG Lipper data, investors pulled $33.53 billion from U.S. equity funds during the week in their largest weekly net withdrawal since December 18, contrasting with $4.84 billion in net purchases the week before.

The Fed kept its benchmark overnight interest rate unchanged on Wednesday, and indicated that two quarter-point cuts were likely later this year, while also forecasting slower economic growth and higher inflation.

U.S. large-cap funds saw $27.38 billion of net selling as investors ended a three-week buying streak.

Small-cap, multi-cap and mid-cap funds also saw outflows of $3.48 billion, $1.42 billion and $1.09 billion, respectively.

Selling pressure in sectoral funds, however, eased to the lowest in three weeks as investors pulled out a net $1.35 billion, compared with combined net sales of $7.54 billion in the prior two weeks.

Tech, communication services and healthcare funds led sectoral outflows, with net sales of $451 million, $230 million and $227 million, respectively.

U.S. bond funds, meanwhile, saw their first weekly outflow in 11 weeks, amounting to $513 million.

Investors divested general domestic taxable fixed income funds and loan participation funds worth $1.56 billion and $1.62 billion, respectively.

In contrast, short-to-intermediate government and treasury funds attracted a net $2.89 billion, the 13th weekly inflow in a row.

U.S. investors, meanwhile, ditched $28.83 billion worth of money market funds after $13.43 billion in net sales a week ago.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru. Editing by Mark Potter)