US equity funds see largest weekly inflow in 3-1/2 months

Jan 16 (Reuters) - U.S. equity ⁠funds witnessed ⁠sharp ‍inflows in the week to January 14 on upbeat earnings expectations ahead of the fourth quarter earnings ‍season, with investors brushing off concerns around geopolitics ​and the Federal Reserve's independence.

Easing inflation pressures, bolstering bets of interest rate ​cuts later this year, also boosted investor sentiment.

Investors bought U.S. equity funds amounting to a net $28.18 billion in their largest weekly net purchase since ​October 1, entirely reversing the $26.02 billion in net sales the prior week, LSEG Lipper data showed.

With the fourth-quarter ​earnings season in its early stage, LSEG data shows that U.S. large- and mid-cap ‌companies are expected to report a 10.81% profit growth for the last quarter. The tech sector ​leads with a forecast 19.32% rise.

U.S. ⁠large-cap equity funds drew a net $14.04 billion weekly inflow after around $31.75 billion net sales in the ‌previous week. Small-cap funds attracted $579 million in net investments while mid-cap funds faced outflows of a net $1.91 billion.

Among sectoral funds, industrial, ‌tech and consumer staples sectors saw net investments to the tune of $1.69 ‌billion, $1.04 billion and $984 million, respectively.

Bond funds, meanwhile, saw $10.12 billion worth of inflows, the largest amount for a week since October 8.

General domestic taxable ‍fixed income funds, short-to-intermediate investment-grade funds and municipal debt funds led with net investments of $3.23 billion, $2.11 ⁠billion and $1.82 billion, respectively, in the most recent week.

Investors, meanwhile, divested $75.72 billion worth of money market funds after approximately a combined $134.94 billion net purchase in the previous two weeks.

(Reporting by Gaurav Dogra; editing by Mark Heinrich)

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