Jan 2 (Reuters) – U.S. stock funds attracted strong inflows for a second straight week in the week ended Dec. 31, as investors celebrated strong annual gains thanks to an artificial intelligence-driven rally and ended the year on an upbeat note about the outlook for corporate profits.
According to data from LSEG Lipper, US equity funds attracted approximately $16.89 billion in inflows during the week, adding to weekly net investments of $18.3 billion from the previous week.
The S&P 500 (^GSPC) gained 16.39% last year, the Nasdaq rose 20.36%, and the Dow Jones Industrial Average rose 12.97%, as these indices finished in the green for the third year in a row.
LSEG data, which covers 2,784 US large- and mid-cap companies, shows that analysts expect earnings to grow around 15.13% in 2026, 2.21 percentage points higher than the 12.92% growth forecast for 2025.
Investors bought a net $16.87 billion worth of large-cap stock funds in the most recent week, after about $37.4 billion in net buying in the previous week.
However, they dumped small-cap funds for $1.42 billion and mid-cap funds for $269 million.
Sector funds also recorded a marginal $116 million in weekly net sales, while healthcare and financial services faced capital outflows worth $502 million and $290 million, respectively.
Meanwhile, investors withdrew $2.09 billion from US bond funds after 12 consecutive weeks of net investments.
They pulled $5.43 billion out of short- and medium-term U.S. government and Treasury funds, broadly reversing a huge net purchase of $7.68 billion a week ago.
However, domestic general taxable fixed income funds and short to intermediate investment grade funds saw inflows of $1.17 billion and $920 million, respectively.
Investors allocated a hefty $83.71 billion to the safety of money market funds as they recorded the largest weekly net buying in four weeks.
(Reporting by Gaurav Dogra Editing by Gareth Jones)