Global Equity Funds Influx

Global equity funds have seen an influx of capital for the eleventh consecutive week, ending December 11, as investors anticipate potential interest rate cuts by the Federal Reserve. This shift has been influenced by a cooling labor market and stable consumer prices in the United States.

According to data from LSEG Lipper, these funds received a net of $10.18 billion, a follow-up to the previous week's $21.19 billion in net purchases.

The U.S. labor market demonstrated a mixed picture last week, showcasing notable job growth for November, despite a slight uptick in the unemployment rate to 4.2%. This combination is seen as a possible catalyst for the Federal Reserve to consider a third rate reduction this month.

Investment trends showed that U.S. equity funds attracted $6.36 billion in net inflows for the sixth week running. Meanwhile, European funds also had a positive trend with $3.24 billion in net inflows. However, Asian funds did not perform as well, experiencing a net outflow of $278 million.

Sector-specific funds experienced their first weekly net outflow in five weeks, totaling $1.94 billion. The healthcare, technology, and consumer discretionary sectors were particularly impacted, with outflows of $1.08 billion, $654 million, and $616 million, respectively.

Bond funds continued to attract investors for the 51st week in a row, with global bond funds bringing in $10.19 billion. Corporate bond funds stood out with $3.21 billion in net inflows, marking the highest weekly intake since September 18. In addition, loan participation funds enjoyed their 12th straight week of inflows, totaling $1.32 billion.

Conversely, money market funds experienced significant withdrawals last week, with investors pulling out $16.29 billion. This was a stark contrast to the substantial $169.16 billion net purchases seen the week prior.

In the commodities sector, energy funds faced a net outflow of $256 million, continuing a trend of losses for three out of the past four weeks. In contrast, gold and precious metal funds experienced net inflows of $190 million.

Emerging market funds also faced challenges, with data covering 29,593 such funds indicating a withdrawal of $2.35 billion from equity funds for the fifth week in a row. Bond funds from these markets also saw net sales amounting to $721 million.

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