U.S. equity funds saw strong inflows in late December as investors celebrated solid annual gains from an AI-driven rally. A total of $16.89 billion flowed into U.S. equity funds, building on the previous week’s $18.3 billion in net investments. Key indexes like the S&P 500 and Nasdaq finished the year with significant gains.

Analysts predict a 15.13% earnings growth for U.S. large- and mid-cap companies in 2026, up from a 12.92% forecast for 2025. In the most recent week, investors poured $16.87 billion into large-cap equity funds, but pulled out $1.42 billion from small-cap funds and $269 million from mid-cap funds.

Sectoral funds experienced $116 million in net sales, primarily in healthcare and financials. U.S. bond funds saw $2.09 billion in withdrawals after 12 consecutive weeks of net investments. Investors also pulled $5.43 billion from U.S. short-to-intermediate government and treasury funds.

Despite the outflows from certain funds, general domestic taxable fixed-income funds and short-to-intermediate investment-grade funds received inflows of $1.17 billion and $920 million, respectively. Investors allocated a significant $83.71 billion to money market funds, marking the largest weekly net purchase in four weeks.

Read more at Yahoo Finance: U.S. equity funds close 2025 on a strong note