(Reuters) – U.S.-based equity funds attracted $4.4 billion of inflows in the week ended Wednesday, following two consecutive weeks of cash outflows totaling $34 billion, according to Refinitiv’s Lipper, as the United States and Mexico struck a deal to avert tariffs.
U.S.-based high-yield junk bond funds – which move in sympathy with equity flows – attracted more than $1.7 billion of inflows in the week ended Wednesday, also following two straight weeks of cash withdrawals, Lipper said.
Tom Roseen, head of research services at Lipper, said it was “definitely a risk-on week” with net new money into corporate investment-grade bond funds of more than $4 billion.
“Interestingly, though, we saw retail investors being net redeemers of equity funds at negative $4.9 billion, while authorized participants were net purchasers of equity ETFs at plus $9.4 billion. So once again it was a tale of two cities,” Roseen said.
Mom-and-pop investors “appear to be content sitting on the sidelines until the trade deals are completed, parking cash into the money market funds of more than $12.9 billion,” he said.
Mom-and-pop investors are also putting money into select bond fund classifications: corporate investment-grade debt funds of plus-$1.2 billion and municipal bond funds of plus-$887 million, their 23rd consecutive week of net inflows.
Reporting by Jennifer Ablan; editing by Phil Berlowitz and Leslie Adler