US equity funds see outflows on profit booking, government shutdown uncertainties

(Reuters) -U.S. investors divested equity funds for the first time in three weeks in the week through October 8, as they favored to take out profits from the recent rally on caution over the rising risks surrounding an ongoing government shutdown. According to LSEG Lipper data, investors withdrew a net $4.52 billion from U.S. equity funds during the week, compared to approximately $36.49 billion net inflows the prior week. Small-cap U.S. equity funds saw significant selling pressure as they faced a net $2.78 billion weekly sales, the sharpest since August 6. Large-cap funds and mid-cap funds, meanwhile, had a weekly net outgo of $2.06 billion and $1.18 billion, respectively. Bucking the trend, investors added U.S. sectoral equity funds of $2.48 billion on a net basis. Tech, healthcare, and metals and mining funds were the most popular with net inflows of $1.19 billion, $1.13 billion and $750 million, respectively. U.S. bond funds saw the most robust demand since early February 2021 with weekly investments in the most recent week standing at a net $13.08 billion. Short-to-intermediate investment-grade funds, short-to-intermediate government and treasury funds, and general domestic taxable fixed income funds received $3.21 billion, $2.98 billion and $1.76 billion, respectively, and led bond fund inflows. U.S. money market funds, meanwhile, remained popular for a third successive week as investors pumped approximately $13.67 billion into these funds. (Reporting by Gaurav Dogra; Editing by Vijay Kishore)

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