U.S. equity funds recorded their second straight week of net redemptions through March 11, with investors withdrawing $7.77 billion, according to LSEG Lipper data. That followed roughly $21.91 billion in net sales the prior week, underscoring a sustained shift away from equity exposures as geopolitical events in the Middle East heightened economic and market uncertainty.
Markets reacted sharply to attacks on energy infrastructure and oil tankers in the region. U.S. crude prices rose 9.7% on Thursday, leaving month-to-date gains at about 42.88% as traders described the situation as the largest oil supply disruption in history. Shipping in the Gulf and through the narrow Strait of Hormuz moved close to a standstill, a development investors cited as a key driver of market sentiment.
Within equity fund categories, the large-cap segment bore the brunt of outflows with net redemptions of $20.98 billion. Mid-cap funds saw $405 million in net withdrawals and small-cap funds recorded $8 million in net outflows. In contrast, the multi-cap sector posted a net weekly inflow of $9.32 billion.
Style-based flows showed investors exiting growth funds to the tune of $4.48 billion, while value funds continued to attract capital for a fifth straight week, bringing in $2.91 billion. The rotation between growth and value persisted amid the wider market reallocation.
Fixed income strategies remained a magnet for cash, drawing an estimated $8.21 billion in net inflows for a 10th consecutive week. Short-to-intermediate government and treasury funds accounted for roughly $4.05 billion of those inflows - the largest weekly amount since December 24. Short-to-intermediate investment-grade funds and municipal debt funds also received net purchases of $2.77 billion and $614 million, respectively.
Cash equivalents saw increased demand as well: U.S. money market funds attracted about $1.5 billion in net inflows, marking a fourth successive week of positive flows into the segment.
Contextual note - Investors shifted allocations across equity market capitalizations, equity styles, and fixed income sectors in response to rising oil prices and shipping disruptions. The result was a pronounced preference for shorter-duration government and treasury exposures, investment-grade credit and municipal debt, plus continued demand for money market instruments.