U.S. equity fund inflows eased in the week to February 4, as a selloff in technology and software stocks tempered investor appetite, despite strong corporate earnings offering pockets of support.
According to data from LSEG Lipper, investors added $5.58 billion to U.S. equity funds during the week, marking a sharp 48% decline from the $10.82 billion recorded a week earlier.
Pressure on software shares intensified after Anthropic launched a legal-focused plug-in for its generative AI chatbot, stoking fears of accelerating disruption across traditional software business models.
U.S. bond funds continued to benefit from a defensive shift, attracting $11.11 billion in net inflows for a fifth consecutive week as investors sought relative stability.
Short- and intermediate-term investment-grade bond funds led fixed-income demand, pulling in $6.34 billion—the largest weekly inflow since at least 2022—while municipal bond funds and inflation-protected funds added $2.38 billion and $1.34 billion, respectively.
Risk aversion was most visible in cash allocations, with U.S. money market funds drawing $83.09 billion in net inflows, their biggest weekly gain since early December, underscoring a broader flight to liquidity amid market uncertainty.
