A hawk-ish Federal Reserve and intense macro volatility have triggered a sharp reversal in U.S. fund allocations. According to LSEG Lipper data for the week ending June 10, investors pulled a net $12.57 billion out of U.S. equity funds—marking the first weekly net outflow since May 20.
Despite the broad market retreat, the appetite for structural tech remains unbreakable. Here is the breakdown:
⚡ The $12.5B Equity Exodus
- The Macro Triggers: Strong payroll data and a hot inflation print aggressively stoked rate-hike bets. However, CME FedWatch shows October rate-hike odds later cooled to 34.6% (down from 51%) on breaking U.S.-Iran peace deal hopes.
- Large-Caps Hit Hardest: The sell-off was heavily concentrated, with U.S. large-cap funds suffering a massive $10.2 billion extraction. Mid-caps and small-caps shed $1 billion and $2.22 billion, respectively.
🧠 Tech Defies the Rout & Financials Gain
- 10 Weeks of Tech Dominance: Defying the macro panic, the technology sector garnered a net $4.39 billion in weekly purchases, holding onto its crown for a 10th consecutive week.
- The Banking Pivot: Investors also rotated a significant $655 million into financial sector funds.
🛡️ Bond Inflows Hit 3-Week High Fixed-income assets acted as a primary safe haven, with U.S. bond fund inflows surging to a three-week high of $12.08 billion.
- Corporate Credit: Investors poured $5.09 billion into short-to-intermediate investment-grade funds (a 5-week high).
- Government Debt: Short-to-intermediate Treasury and government funds locked in $4.14 billion (a 3-week high).
- Cash Unwinding: To fund these moves, money market funds saw a weekly net sale of $16.34 billion, sharply reversing the prior week’s massive $111.36 billion influx.