US equity funds see outflows on rate-cut uncertainty, AI worries

Feb 13 (Reuters) - U.S. ‌equity funds ​recorded ​outflows in the week to February 11 on worries over AI-related corporate ‌spending and as a stronger jobs report dampened ⁠expectations of Federal Reserve rate cuts.

Investors exited a ‌net $1.42 billion worth of U.S. ‌equity funds during the week in their first weekly net sales since January 21, ​LSEG Lipper data showed.

The Nasdaq Composite Index fell 2.03% on Thursday amid renewed concerns ⁠over potential disruption from artificial intelligence across sectors, including software, legal ​services and wealth management.

Investors, meanwhile, awaited January inflation data due on Friday for ​fresh cues on the outlook ‌for interest rates.

U.S. large- and mid-cap equity funds recorded outflows of $12.34 billion ⁠and $787 million, respectively, during the week, while small-cap funds bucked the trend with net inflows of $2.01 ⁠billion.

Investors pumped $13.37 billion into U.S. bond funds as they extended ​the recent run of net purchases into a sixth consecutive week.

Short-to-intermediate investment-grade funds, short-to-intermediate government and treasury funds ‌and general domestic taxable fixed income funds stood out with $4.29 billion, $3.09 billion ‌and $2.7 billion, respectively, in net inflows.

Investors, meanwhile, ⁠withdrew $25.83 billion from U.S. ‌money market funds ​after two successive weeks of net inflows.

(Reporting by Gaurav Dogra; Editing by Anil ‌D'Silva)

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