Investors Rush to U.S. Equity Funds Amid New Treasury Selection

U.S. equity funds experienced a significant influx of capital as investors injected $12.78 billion in the week ending November 27. According to LSEG Lipper data, this increase in net purchases marks a substantial rise compared to the previous week’s $3.03 billion. The uptick in investor confidence is attributed to Scott Bessent's appointment as U.S. Treasury Secretary and the decline in Treasury yields, which alleviated concerns regarding growth stocks.

Bessent, known for his fiscal conservatism, was announced last week as part of the incoming Trump administration, heightening market expectations that the U.S. would keep debt levels in check during Trump’s second term. This appointment coincided with a considerable rise in investments across various segments of the equity market.

Large-cap and small-cap funds attracted significant interest, bringing in $5.27 billion and $3.11 billion, respectively. In contrast, multi-cap and mid-cap funds did not perform as well, facing net outflows of $419 million and $137 million, respectively.

Sector-specific U.S. funds also saw high demand, attracting a net total investment of approximately $4.72 billion. The financial, discretionary consumer, and technology sectors were the biggest beneficiaries, drawing in $2.08 billion, $990 million, and $962 million net purchases, respectively.

The appeal of U.S. bond funds continued for the 26th consecutive week, generating a net influx of $6.92 billion. Investors maintained steady interest in domestic taxable fixed-income funds, achieving a total net purchase of $3.01 billion for the 15th consecutive week. Additionally, U.S. short-to-intermediate investment-grade funds and mortgage funds attracted net inflows of $1.53 billion and $1.48 billion, respectively.

Despite the increase across various fund categories, U.S. money market funds experienced approximately $2.37 billion in net sales following the previous week’s significant outflow of $26.82 billion.