U.S. Equity Funds Hit by Largest Outflow Amid Trade Concerns

U.S. equity funds saw their largest weekly outflow in four weeks by March 5, attributed to a technology sector selloff and trade war fears. A net $9.54 billion was divested from U.S. equity funds, while safer money market and bond funds received inflows, indicating risk aversion among investors.

In a turbulent week ending on March 5, U.S. equity funds grappled with their largest weekly outflow in a month. This financial exodus, totaling a net $9.54 billion, was fueled by a selloff in the tech sector and growing trade tensions following President Trump's imposition of stringent tariffs on Canadian, Mexican, and Chinese imports.

Small-cap funds bore the brunt with the largest outflow since December 18, recording $3.48 billion in net sales. Mid-cap funds did not fare much better, witnessing outflows of $2.06 billion. Conversely, large-cap funds managed to attract net inflows of $2.93 billion. Sectoral funds, including technology, industrials, and financial sectors, faced significant withdrawals, cumulatively reaching $4.48 billion.

Meanwhile, investors flocked to the relative safety of money market funds for the second consecutive week, purchasing a net $46.77 billion. Additionally, U.S. debt securities remained favorable, with investors acquiring $5.4 billion in bond funds. This shift towards safer assets highlights a cautious investment stance amid economic uncertainties.