(Reuters) – Demand for global equity funds fell sharply in the week to Jan. 15 as U.S. Treasury yields rose and expectations for a Federal Reserve rate cut fell after a strong jobs report.
Global equity funds witnessed just $37.79 million in net buying during the week, the smallest weekly buying since Dec. 18, 2024, according to LSEG Lipper data.
Last week, investors pondered the possibility that the Fed may have finished cutting rates as data from the Labor Department showed that US job growth accelerated in December, while the unemployment rate fell to 4.1% from 4.2% in November.
Reference 10-year yield (^TNX) climbed 4.805% after the report, its highest level since November 2023.
However, the US core inflation reading for December came in below expectations on Wednesday, rekindling hopes for further cuts.
During the week ended Jan. 15, investors pulled a net $8.23 billion from U.S. stock funds, the largest outflow since Dec. 18, 2024, while they poured $5.07 billion, or $1.62 billion, into Asian and European funds.
Sector equity funds saw $447 million in inflows, driven by $1.08 billion in investment in the financial sector.
Meanwhile, global bond funds attracted $8.88 billion, down sharply from $19.67 billion last week.
Short-term global bond funds received $5.02 billion and loan participation funds withdrew $1.39 billion, but sovereign bond funds saw only $137 million in inflows, the lowest in three weeks.
Money market funds faced net sales of $94.13 billion, a reversal from $158.68 billion in purchases the previous week.
Precious metals funds snapped a two-week selling streak with $327.55 million in purchases, while energy funds posted a sixth week of outflows, losing $54 million.
Emerging markets data for 29,634 funds showed stocks witnessed sales worth $4.06 billion, the biggest weekly outflow in seven weeks. Bond funds, however, netted $798 million worth of buying.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Varun HK)
