Global equity funds saw their strongest inflows in more than a month as investors positioned for the Federal Reserve’s latest rate cut and a potential stabilizing of monetary policy into 2026.
MARKET INSIDER – According to LSEG data, equity funds attracted $12.9 billion in the week ending December 10 — the biggest weekly haul since early November — even as concerns persisted over stretched valuations in technology and the rapid pace of AI-driven capital spending.
Europe led the resurgence with $6.4 billion in inflows, building on the previous week’s momentum. U.S. equity funds added $3.3 billion, while Asia drew $1.3 billion. Sector-specific allocations were also robust, with investors channeling more than $2.1 billion into thematic funds. Metals and mining, utilities, and industrials stood out as beneficiaries, reflecting a rotation toward more defensive or cyclical parts of the market.
The Federal Reserve’s quarter-point rate cut on Wednesday — paired with a signal that further reductions may pause for now — shaped much of the positioning. Although policymakers emphasized that inflation “remains somewhat elevated,” investors appeared encouraged by the prospect of a more stable policy path heading into 2026.
Beyond equities, risk appetite remained firm. Global bond funds posted their 34th consecutive week of inflows, adding $8.23 billion, with short-duration and euro-denominated strategies in particular demand. Commodity funds focused on gold and precious metals attracted inflows for a fifth straight week as investors continued to hedge macro uncertainty.
In emerging markets, the buying streak extended: equity funds absorbed $2.78 billion, marking a seventh straight week of gains, while bond funds saw more muted interest with $68 million in new money.
The only notable reversal came in money markets, where funds recorded nearly $13 billion in outflows following an exceptionally large inflow the prior week, suggesting investors are gradually reallocating back into risk assets as global monetary policy approaches an inflection point.
