U.S. investors shifted heavily into money market funds in the week ending Aug. 7, retreating from riskier assets during a stock market sell-off fueled by fears over an economic slowdown.
According to LSEG data, investors poured a massive $47.48 billion into U.S. money market funds in the largest weekly inflow since April 3, while simultaneously offloading $7.39 billion in equities, ending a three-week buying streak.
Last week, a weaker-than-expected U.S. payrolls report and disappointing manufacturing data raised concerns about the economy's health, fueling a further sell-off in stock markets.
U.S. investors withdrew $2.42 billion from small-cap funds, breaking a streak of three consecutive weeks of net purchases. Meanwhile, U.S. mid-cap and multi-cap funds saw outflows of $400 million and $382 million, respectively, although large-cap funds attracted $1.68 billion in net purchases.
By sector, financials saw a significant outflow of $1.36 billion as investors turned net sellers after three weeks of net purchases. Technology and communication services sectors also experienced notable outflows, totaling $657 million and $521 million, respectively
Demand for U.S. bond funds also cooled during the week as they received just $452 million, the smallest amount for a week in 10.
Investors dumped a sharp $3.07 billion worth of loan participation funds, registering the largest weekly net sales since at least October 2020. Conversely, short/intermediate investment-grade, and municipal debt funds gained $1.31 billion and $674 million worth of inflows.