Investors pull back from equities as Fed signals pause; tech sector draws strongest inflows since October
US equity fund inflows plunged to US$1.81bn in the week to October 29, a sharp drop from the previous week’s US$9.65bn.
According to LSEG Lipper data reported by Reuters, investors paused ahead of a widely anticipated US Federal Reserve rate cut and a critical wave of technology earnings.
The Federal Reserve delivered a 0.25 percent rate cut as expected, but signalled it may keep rates steady in December in the absence of new federal data, further contributing to investor caution.
Meanwhile, the technology sector stood out, attracting US$1.65bn in net inflows—the largest since October 1—while financials and consumer discretionary sectors experienced notable outflows of US$662m and US$314m, respectively.
Source: LSEG, Weekly Flows into US Equity Sector Funds, cited by Reuters
Large-cap equity funds continued to draw interest, with a second consecutive weekly inflow of US$1.57bn. However, mid-cap and small-cap funds saw outflows of US$1.65bn and US$1.44bn, respectively, as per Reuters.
Bond funds remained a bright spot, with US$4.91bn in inflows marking the fourth straight week of gains.
Investors favoured short-to-intermediate investment-grade funds and general domestic taxable fixed income funds, which received US$1.72bn and US$1.47bn, respectively.
In contrast, short-to-intermediate government and Treasury funds saw net outflows of US$1.23bn.
Source: LSEG, Weekly Flows into US Bond Funds, cited by Reuters
Money market funds also maintained momentum, recording US$1.46bn in inflows for a second consecutive week.
The previous week’s robust inflows had been buoyed by optimism over a strong earnings season and easing US-China trade tensions, with technology, industrial, and consumer staples sectors all benefiting from renewed investor appetite, as reported by Reuters.
