U.S. equity funds record outflows on caution over higher yields

U.S. equity funds saw a net $12.05 billion outflow in the week to May 20 as investors locked in gains and grew cautious amid rising inflation and a surge in long-term yields. The 30-year U.S. Treasury yield climbed to 5.201% (a level last seen in 2007), prompting rotations out of equities—particularly large-cap funds—and into bonds and cash. Large-, mid- and small-cap funds shed $7.18bn, $1.86bn and $555m, respectively, though technology sector funds continued a seventh straight week of inflows (+$2.57bn). U.S. bond funds attracted about $12.5bn and money market funds drew roughly $12.04bn, signaling a defensive shift that could pressure equity performance, especially growth-sensitive sectors.