U.S. equity fund inflows cooled ahead of Nvidia's earnings

Feb 27 (Reuters) - U.S. equity funds witnessed a significant drop in demand in the seven days to February 25 as investors, worried about lofty tech valuations and massive spending in the sector, exercised caution ahead of Nvidia's fourth-quarter results.

In net terms, they bought U.S. equity funds of just $2.01 billion during the week, compared to $11.76 billion worth of net purchases the week before.

Nvidia's shares NVDA.O dropped 5.46% on Thursday despite reporting better-than-forecast fourth-quarter results, as its revenue growth decelerated during the last quarter.

U.S. equity value funds had a third successive weekly net inflow to the tune of $630 million but growth funds had roughly $3.53 billion worth of net outflows.

U.S. sectoral fund inflows cooled to a three week low of $152 billion, with industrials, metals and mining, and tech securing net inflows of $904 million, $711 million and $522 million, respectively, while financials faced an outflow of $2.26 billion.

Demand for bond funds also eased to an eight week low, as investors added a net $5.15 billion to these funds in the most recent week.

Short-to-intermediate investment-grade funds attracted $1.51 billion, short-to-intermediate government and treasury funds gained $1.12 billion, while municipal debt funds drew $1.03 billion and led the inflows into U.S. bond funds.

Inflows in money market funds, meanwhile, surged to a three week high of $21.21 billion in the week.