Investment flows into mutual funds and exchange-traded funds reinforce the degree to which large technology stocks have dominated the U.S. stock market this year—that is, until this month’s well-documented rotation out of those stocks.
Technology funds attracted $4.2 billion in net inflows in the second quarter, wrapping up a first half in which when they gathered $17 billion, according to an LPL analysis of Morningstar data. Of the 10 market sectors composing the benchmark S&P 500 Index, only two others—industrials and financials—had net positive flows.
As investors focused on large, growth-oriented tech stocks, they largely ignored smaller and value-oriented stocks. Large value stocks suffered net outflows of $7.8 billion and $18.1 billion in the second quarter and first half, respectively, more than any other Morningstar category. Mid-cap value, mid-cap growth and small growth stocks all ranked in the top 10 for most net outflows in the first half.
The direction of flows reflect a U.S. stock …