"Blood is flowing endlessly"! Tariff storm + technology stock "performance kill" over 10 billion USD funds flee from US stocks
Investors net sold $10.71 billion in U.S. stock funds as Trump's tariffs and poor performance of tech stocks heightened market unease. This marks the largest single-week sell-off since December 2024. Meanwhile, Asian and European funds attracted inflows of $4.86 billion and $1.88 billion, respectively. Despite large-cap stock funds facing outflows of $6.44 billion, sector funds still attracted inflows of $1.2 billion. Bond funds also saw favor for the fifth consecutive week, attracting $9.22 billion in funds
According to the Zhitong Finance APP, as of the week ending February 5, U.S. stock funds experienced their fourth weekly outflow in five weeks, due to U.S. President Donald Trump's tariffs escalating geopolitical risks and investors being cautious about the weaker-than-expected earnings of major technology companies. Data from LSEG Lipper shows that investors net sold $10.71 billion worth of U.S. stock funds, marking the largest single-week sell-off since December 18, 2024. In contrast, investors net allocated $4.86 billion and $1.88 billion to Asian and European funds, respectively.
Fund flow situation of U.S. stocks, bonds, and money market funds
Disappointing cloud revenue growth from Google (GOOGL.US) and its massive investments in artificial intelligence, coupled with weak sales forecasts from AMD (AMD.US) for data centers, have heightened investor concerns about large-scale AI investments.
U.S. investors withdrew $6.44 billion from large-cap funds, the largest weekly withdrawal since December 18 of last year. They also sold off small-cap funds, diversified equity funds, and mid-cap funds worth $2.02 billion, $1.12 billion, and $335 million, respectively.
However, U.S. sector funds attracted $1.2 billion in inflows for the third consecutive week, with financial and consumer discretionary funds attracting $1.01 billion and $907 million, respectively.
Meanwhile, investors purchased $39.61 billion in money market funds, following a net sale of $35.13 billion the previous week.
Bond funds have been favored for the fifth consecutive week, attracting $9.22 billion in inflows during the week.
U.S. general domestic taxable fixed income funds, short- to intermediate-term investment-grade funds, and loan participation funds were particularly popular, attracting $4.64 billion, $3.31 billion, and $2.93 billion, respectively