The tech panic has paused, and the cash is coming off the sidelines.
According to the latest LSEG Lipper data, U.S. equity funds recorded a massive $11.77 billion net inflow for the week ending February 18—the largest weekly purchase since mid-January. A cooler-than-expected CPI report has reignited hopes for Federal Reserve rate cuts, but the way investors are allocating this capital tells the real story.
🔄 THE UNDER-THE-HOOD ROTATION: Investors are buying the market, but they are actively de-risking their tech concentration.
- Value Over Growth: U.S. Value funds attracted $2.65 billion in net inflows (their second straight week of gains), while Growth funds suffered $2.28 billion in net outflows.
- Sector Selectivity: Sector funds pulled in $1.82 billion, with Industrials ($1.3B) actually edging out Tech ($1.19B) for the week.
🛡️ THE BARBELL STRATEGY: Even as equities surge, allocators are keeping a heavy defensive posture.
- Fixed Income: U.S. Bond funds attracted $10.27 billion, marking an impressive seventh consecutive week of net purchases, led by short-to-intermediate investment-grade and Treasury funds.
- Cash Buffers: Money market funds absorbed another $12.79 billion.
💡 ANALYST TAKEAWAY: The “Everything Rally” is transforming into the “Selective Rally.” As Mark Haefele (CIO at UBS Global Wealth Management) noted: “We maintain an attractive view on the overall U.S. equity market, but investors should consider diversifying concentrated tech positions.” This data proves the smart money is doing exactly that—locking in a barbell strategy that pairs cyclical Value/Industrials with the safety of short-duration Fixed Income, rather than blindly chasing mega-cap tech.
👇 Asset Allocators: Are you actively trimming your Growth allocations to fund Value and Industrials, or is this just a short-term tactical rotation? Let me know below!