Dec 12 (Reuters) – Global equity funds attracted significant inflows in the week to December 10 as investors positioned for a potential Federal Reserve rate cut, despite lingering concerns over stretched tech valuations and heavy AI-related spending.
Investors acquired global equity funds of a net $12.9 billion, the highest for a week since $22.72 billion net additions in the week through November 5.
The U.S. central bank on Wednesday cut interest rates by a quarter percentage point but signalled it will likely pause further reductions for now, saying inflation “remains somewhat elevated” and the outlook is still uncertain.
European funds led regional equity fund inflows as these funds drew $6.4 billion, adding to the prior week’s $6.47 billion net purchase.
The U.S. and Asian funds, meanwhile, saw $3.3 billion and $1.3 billion weekly inflows, respectively.
Investors added sectoral funds of a net $2.13 billion, the most for a week since November 12.
They snapped up metals and mining, utility and industrial sector funds of roughly $889 million, $824 million and $405 million, respectively, on a net basis.
In parallel, money market funds faced $12.99 billion worth of outflows following the prior week’s $110.4 billion net inflows.
Global bond funds stayed popular for a 34th week, with a net $8.23 billion in weekly inflows.
Short-term bond funds witnessed approximately $2 billion worth of inflows for a sixth successive week of net purchase. Euro denominated bond funds also attracted a significant $1.9 billion.
Gold and precious metals commodity funds were in demand for a fifth successive week, with weekly inflows totaling a net 1.9 billion in the week.
Emerging markets data for 28,720 funds showed that investors pumped $2.78 billion into equity funds, extending their most recent buying streak into a seventh straight week. Bond funds saw a moderate $68 million weekly net inflow.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Sahal Muhammed)
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