U.S. equity funds saw net inflows of $11.83 billion in the week ended July 29, breaking a two-week run of redemptions and more than offsetting the combined $10.68 billion that left those funds in the prior fortnight, according to LSEG Lipper data.
Investors concentrated purchases in mega-cap and large-cap vehicles, with U.S. large-cap funds attracting a net $11.57 billion - their largest weekly net buy since June 24. By contrast, mid-cap and small-cap funds experienced outflows of $2.29 billion and $196 million, respectively.
The technology sector was a primary beneficiary of the rotation, drawing $4.9 billion of net inflows, the biggest weekly gain for tech-focused funds since July 8. Positive results from Microsoft and Amazon on Thursday helped to calm investor concerns about heavy capital spending after earlier reports from Alphabet and Tesla showed negative cash flows and pressured the technology segment. The S&P 500 rose 1.66% on the day.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "Microsoft indicated further acceleration in cloud revenue growth for the current quarter, while Alphabet reported an increase in advanced cloud orders that have yet to be recorded as revenue. We remain constructive on the AI growth story."
Sector-level flows beyond technology showed selective buying. Financial-sector funds took in $1.96 billion while consumer staples funds received $751 million in net purchases.
On the fixed-income side, inflows into U.S. bond funds slowed to $1.34 billion for the week, the smallest weekly total in 15 weeks. Net purchases of short-to-intermediate government and Treasury funds eased to $865 million, and short-to-intermediate investment-grade funds drew $1.08 billion; both figures were down from $1.32 billion and $1.54 billion, respectively, in the prior week.
Investors withdrew $466 million from general domestic taxable fixed-income funds, while municipal debt funds saw net purchases of $761 million.
Money market funds continued to lose cash, recording net outflows of $11 billion for the third consecutive week.
Market snapshot
- S&P 500 index advanced 1.66% during the period.
- Large-cap funds led equity inflows, with mid- and small-cap funds experiencing outflows.
- Technology funds recorded their largest weekly inflow since early July.