U.S. equity funds have a large inflow of funds due to optimistic earnings

© Reuters. File photo: On November 3, 2009, a banker at a bank in Westminster, Colorado, was calculating dollars. REUTERS/Rick Wilking

(Reuters)-In the week ending July 28, U.S. equity funds saw strong capital inflows, thanks to optimism about earnings and hopes for a faster economic recovery from the COVID-19 pandemic.

Data from Refinitiv Lipper shows that US equity funds have a net inflow of US$8.03 billion, the largest inflow in five weeks.

(Illustration: Funds flow into the U.S. stock, bond and money market: https://fingfx.thomsonreuters.com/gfx/mkt/xmpjogjzzvr/Fund%20flows%20into%20U.S.%20equities%20bonds%20and%20money%20market jpg)

The inflow of equity funds was mainly concentrated in exchange-traded funds, and their holdings increased by US$10.9 billion.

On the other hand, US equity mutual funds are facing an outflow of US$943 million, highlighting investors’ preference for passive funds in recent months.

US growth funds received US$2.7 billion, the largest weekly inflow in four months, while US value funds faced weak outflows.

(Picture: Funds flowing into the US stock sector: https://fingfx.thomsonreuters.com/gfx/mkt/mypmnmxmmvr/Flows%20into%20U.S.%20equity%20sector%20funds.jpg)

(Illustration: Capital flows into the US Growth and Value Fund: https://fingfx.thomsonreuters.com/gfx/mkt/mopanmdmkva/Fund%20flows%20into%20U.S.%20growth%20and%20value%20funds.jpg)

Among industry funds, the demand for technology, consumer staples and industrial products was strong, with inflows of US$931 million, US$693 million and US$409 million, respectively.

At the same time, US bond funds also attracted $3.3 billion, the highest level in three weeks, due to lingering concerns about rising inflation and the delta variant of the new coronavirus.

(Picture: Flowing into US bond funds: https://fingfx.thomsonreuters.com/gfx/mkt/zdpxoykyrvx/Flows%20into%20U.S.%20bond%20funds.jpg)

Data show that the inflation protection fund attracted a record $2.2 billion this week.

The US money market fund received a net $17.9 billion, the largest in nine weeks.

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