U.S. equity funds post weekly outflows as chip selloff hits investor sentiment
Investor appetite for U.S. stocks weakens in the week through July 15 as losses in semiconductor shares and rising U.S.-Iran tensions offset support from corporate earnings and softer inflation data. The shift leaves equity funds with their first weekly net outflow in three weeks, while bond funds continue to attract fresh money.
Highlights
- U.S. equity funds see $4.8 billion in net outflows for the week through July 15 as chip stocks and the Philadelphia SE Semiconductor Index fall sharply.
- Investors shift away from growth funds with $7.18 billion in net disposals, while value funds attract $3 billion in inflows for a third consecutive week.
- U.S. bond funds gain $9.89 billion in their 13th straight week of inflows, but money market funds record a significant $68.03 billion in outflows.
Fund flow data show rotation away from equities
According to Reuters, citing LSEG Lipper data, U.S. equity funds record net outflows of $4.8 billion in the week through July 15, marking the first weekly net disposal in three weeks.Pressure on the category comes as chip stocks retreat after rallying about 87.75% in the previous quarter. The Philadelphia SE Semiconductor Index falls roughly 8.48% so far this week, with SanDisk, Marvell Technology and Intel down 26.35%, 20.15% and 11.71%, respectively.
Investors sell a net $7.18 billion in growth funds, reversing $4.23 billion in net purchases the previous week. Value funds, meanwhile, attract inflows for a third straight week, drawing $3 billion.
Bond funds stay in favor as sector trends diverge
Among sector funds, technology inflows cool to a three-week low of $1.57 billion. Healthcare funds attract a net $465 million, while consumer discretionary funds see about $579 million in withdrawals and communication services funds lose $409 million.U.S. bond funds remain popular for a 13th consecutive week, pulling in $9.89 billion. Investors buy $2.38 billion of short-to-intermediate investment-grade funds, $1.47 billion of short-to-intermediate government and Treasury funds, and $1.36 billion of municipal debt funds.
U.S. money market funds, meanwhile, post $68.03 billion in outflows, the largest weekly withdrawal since April 15.
In our earlier article on the selloff in U.S. chip and AI-linked stocks, we explained how investors began unwinding crowded semiconductor positions as doubts resurfaced about the durability of AI-driven valuations. We also noted that the weakness was spreading into other growth names and was reinforced by rising geopolitical risks that lifted overall market volatility.
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