In anticipation of the Federal Reserve's policy announcement on Wednesday, American investors withdrew from risky equities funds and invested heavily in money market funds over the week leading up to December 3.
According to LSEG Lipper statistics, they made their biggest weekly net purchase since November 5, accumulating around $104.75 billion in U.S. money market funds.
Investors were cautious despite forecasts of a rate decrease, and the trend toward safer assets was reinforced by stretched valuations in mega-cap technology sectors.
In a second week in a row, they sold out U.S. equities funds totaling a net $3.52 billion. For the sixth consecutive week, mid-cap funds saw a net outflow of $494.92 million. Net disposals of $1.18 billion and $476 million, respectively, were also made by small-cap and large-cap funds.
However, sectoral stock funds continued to be popular for a second week, with net inflows of almost $510 million. There were inflows of $510 million into industrial funds and $293 million into gold and precious metals equities funds. In contrast, just $314 million was drawn to U.S. bond funds, the lowest amount for a week since October 1.
While short-to-intermediate government and treasury funds experienced a weekly outflow of $1.58 billion, short-to-intermediate investment-grade funds and municipal debt funds obtained inflows of $1.45 billion and $737 million, respectively.
