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, 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, with a notable rise in job growth for November, despite a slight uptick in the unemployment rate to 4.2%. This combination of factors is seen as a possible catalyst for the Federal Reserve to consider a third rate reduction in the current month.
Investment trends showed that U.S. equity funds attracted $6.36 billion in net inflows for the sixth week running, while European funds also saw a positive trend with $3.24 billion in net inflows. However, Asian funds did not fare as well, with a net outflow of $278 million.
Sector-specific funds experienced a shift, recording their first weekly net outflow in five weeks, totaling $1.94 billion. Healthcare, technology, and consumer discretionary sectors were particularly affected, 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, while loan participation funds enjoyed their 12th straight week of inflows, totaling $1.32 billion.
Money market funds, on the other hand, saw significant withdrawals last week, with investors pulling out $16.29 billion. This was a notable reversal from 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. Contrastingly, 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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