U.S. equity funds attracted substantial fresh capital in the week ending February 18, with net purchases totalling $11.77 billion, the largest weekly inflow recorded since January 14, according to LSEG Lipper data. Market participants attributed the move to reduced anxiety about a technology-sector selloff after a cooler-than-expected consumer price inflation report increased expectations for Federal Reserve rate cuts.
Money continued to flow unevenly within equity styles. Value-focused U.S. equity funds maintained their appeal for a second consecutive week, taking in a net $2.65 billion, while growth funds experienced net withdrawals of $2.28 billion in the same period. Sector-level allocations also shifted: U.S. sectoral funds drew a net $1.82 billion, with industrials and technology-focused funds posting net purchases of $1.3 billion and $1.19 billion, respectively.
Commenting on positioning, Mark Haefele, chief investment officer at UBS Global Wealth Management, emphasized a cautious stance on concentrated technology exposure, saying, "We maintain an attractive view on the overall U.S. equity market, but investors should consider diversifying concentrated tech positions. Within technology, selectivity is key."
Fixed income and cash instruments saw continued demand alongside equities. Investors allocated $10.27 billion to U.S. bond funds, extending a run of net purchases to seven straight weeks. Within those allocations, specific categories received meaningful inflows: U.S. short-to-intermediate investment-grade funds attracted a net $3.61 billion, general domestic taxable fixed income funds drew $2.56 billion, and short-to-intermediate government and treasury funds collected $2.26 billion.
Short-term cash options also saw fresh buying, with money market funds recording $12.79 billion of net purchases, marking the third weekly inflow in four weeks. The combined movement into equities, bonds and money markets highlights a multi-asset reallocation by investors responding to evolving rate cut expectations and the shifting risk outlook for technology names.