Key Facts
According to data from LSEG Lipper, U.S. equity funds experienced an outflow of $16.22 billion in the week ending May 7, marking the fourth consecutive week of withdrawals. This represents the largest weekly outflow in approximately six weeks. The uncertainty surrounding U.S. tariff policies and the ongoing U.S.-China trade negotiations has led investors to adopt a more cautious approach.
Breaking down the outflows, large-cap equity funds saw the largest withdrawals at $13.6 billion, followed by mid-cap funds with $1.12 billion and small-cap funds with $917 million. Sector-specific funds also recorded significant outflows, totaling $2.89 billion. Among these, financial sector funds lost $1.18 billion, technology sector funds saw $507 million in outflows, and metals and mining funds experienced $420 million in withdrawals.
In contrast, U.S. bond funds attracted $3.53 billion in inflows, the highest weekly figure in eight weeks. Short- and medium-term bond funds reversed their previous week’s trend, recording $1.15 billion in inflows after a $765 million outflow the prior week. Municipal bond funds also saw strong demand, with $1.06 billion in inflows.
Money market funds experienced a substantial inflow of $28.4 billion, the largest in nearly two months, reflecting heightened investor preference for safer, liquid assets amid market uncertainty.
On the international front, the U.S. reached a trade agreement with the United Kingdom on May 8, sparking cautious optimism about progress in other trade negotiations. Former President Donald Trump also hinted at the possibility of tariff reductions depending on the outcome of discussions with China.
Despite the recent outflows from equity funds, Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, expressed confidence in U.S. equities as an attractive investment option. He projected the S&P 500 Index to reach 5,800 points by the end of the year.
Summary
U.S. equity funds saw $16.22 billion in outflows for the week ending May 7, marking the fourth consecutive week of withdrawals, according to LSEG Lipper data. This represents the largest weekly outflow in six weeks, driven by investor caution amid uncertainty over U.S. tariff policies and U.S.-China trade negotiations.
Large-cap equity funds accounted for the majority of outflows at $13.6 billion, followed by mid-cap funds with $1.12 billion and small-cap funds with $917 million. Sector-specific funds also faced significant withdrawals, totaling $2.89 billion, with financial sector funds losing $1.18 billion, technology sector funds $507 million, and metals and mining funds $420 million.
Conversely, U.S. bond funds attracted $3.53 billion in inflows, the highest in eight weeks. Short- and medium-term bond funds reversed the previous week’s outflows, recording $1.15 billion in inflows, while municipal bond funds gained $1.06 billion. Money market funds saw a substantial $28.4 billion inflow, the largest in nearly two months, reflecting a shift toward safer, liquid assets.
On May 8, the U.S. reached a trade agreement with the United Kingdom, raising cautious optimism for progress in other trade negotiations. UBS Global Wealth Management’s CIO, Mark Haefele, projected the S&P 500 Index to reach 5,800 points by year-end, citing U.S. equities as an attractive investment.
