U.S. investors snapped up equity funds for a fifth successive week through November 4, motivated by a rally in Wall Street’s main indexes, optimism for strong economic growth, and expectations of a third consecutive Federal Reserve rate cut this month.
According to LSEG data, investors acquired U.S. equity funds worth $8.85 billion on a net basis during the week after about $11.8 billion worth of net purchases in the previous week.
U.S. economic activity has expanded slightly in most regions since early October, the Fed said earlier this week.
Market participants are also gearing up for a potential rate cut later this month, with the CME Fed Watch tool currently indicating a 66.7% likelihood of a quarter-point reduction.
The monthly payrolls report, due later on Friday, could sway the Fed’s decision.
U.S. large-cap funds witnessed a robust $6.6 billion inflow, the largest in three weeks. Investors also racked up small-cap and multi-cap funds of a net $2.59 billion and $585 million, respectively.
Meanwhile, U.S. sectoral funds experienced a net $321 million worth of outflows, following inflows for three weeks in a row. Investors ditched tech and healthcare sector funds worth $914 million and $538 million, respectively.
At the same time, weekly net purchases in U.S. bond funds eased to a six-week low of $3.7 billion.
The short-to-intermediate investment-grade, general domestic taxable fixed income, and municipal debt funds still received a significant $2.01 billion, $1.36 billion, and $1.15 billion worth of inflows, respectively.
Meanwhile, investors pumped a hefty $121.34 billion into U.S. money market funds, the biggest amount in any week since April 2020.
