US equity funds post inflows for a second straight week

Oct 23 (Reuters) - US equity funds attracted inflows for a second consecutive week in the seven days to October 21, as easing Treasury yields and strong corporate earnings so far bolstered investor appetite, although caution over the artificial intelligence trade capped weekly net purchases.

US equity funds recorded net inflows of $5.07 billion, a roughly 62% decline from $13.37 billion the week before, according to LSEG Lipper data.

Easing US Treasury yields partly alleviated concerns over high borrowing costs, with the benchmark 10-year yield down nearly 38 basis points from its early-October peak of 5.3645%, a 24-1/2-year high.

Investors also drew confidence from the solid start to the US earnings season. Nearly 24% of S&P 500 companies have reported, with roughly 82% topping analysts’ average estimates, according to LSEG data.

The tech-heavy Nasdaq Composite, however, fell 2.6% on Thursday after Meta reported strong results on Wednesday but announced plans to issue non-voting stock, reigniting concerns about rising capital commitments across the technology sector.

Investors bought a net $8.63 billion of US large-cap funds and $1.92 billion of mid-cap funds during the week, while withdrawing a net $4.24 billion from small-cap funds.

Sectoral funds attracted $1.8 billion in weekly inflows after two consecutive weeks of outflows, driven largely by $1.18 billion flowing into metals and mining funds. Technology and industrials funds also recorded net inflows of $429 million and $269 million, respectively.

US bond funds recorded weekly outflows of $969 million, ending a 26-week streak of net purchases.

Investors withdrew $3.3 billion from longer-dated government and Treasury fixed-income funds after three weeks of inflows, but invested $1.76 billion in short- to intermediate-term government and Treasury funds. They also added a notable $1.56 billion to municipal debt funds.

Meanwhile, money market funds attracted $14.82 billion in weekly inflows, following roughly $45.93 billion in outflows the previous week.