U.S. Equity Funds Witness Record Outflows Amid Tariff Talks

U.S. equity funds faced a challenging period for the fourth week running, with investors pulling out a hefty $16.22 billion, largely due to ongoing uncertainties regarding trade tariffs and U.S.-China trade negotiations. The outflows mark the largest weekly net sales seen since March 19, according to data provided by LSEG Lipper.

Nevertheless, there remains a glimmer of hope as a recent U.S.-U.K. trade agreement has stirred cautious optimism for progress on tariffs with other nations. Additionally, U.S. President Donald Trump hinted at constructive talks with China that could potentially result in lower tariffs. "We continue to view U.S. equities as attractive," commented Mark Haefele, CIO at UBS Global Wealth Management, reaffirming a year-end S&P 500 target of 5,800.

Large-cap and mid-cap U.S. equity funds were hit hardest, with outflows of $13.6 billion and $1.12 billion, respectively, while small-cap fund outflows eased to a six-week low of $917 million. Amid these challenges, sentiment towards U.S. fixed-income markets improved, as fund investors funneled a net $3.53 billion into U.S. bond funds, reflecting the most substantial inflow in eight weeks. Concurrently, money market funds received a net injection of $28.4 billion, marking their largest weekly net purchase since March 5.

(With inputs from agencies.)