Investors flocked to global money market funds during the week ending January 8, driven by concerns over potential tariff hikes linked to the upcoming U.S. administration change and caution ahead of a key jobs report that could influence expectations for Federal Reserve rate cuts.
LSEG Lipper data shows that investors poured $158.73 billion into global money market funds, marking the second-largest weekly net inflow since April 2020.
U.S. President-elect Donald Trump, set to take office on January 20, has pledged a 10% tariff on all global imports to the U.S. and has also threatened a 25% tariff on imports from Canada and Mexico on his first day in office.
Global equity funds saw inflows for a third consecutive week, totaling a net $11.36 billion.
European equity funds received a net inflow of $8.7 billion, the largest in three weeks, while Asian funds gained a net $5.6 billion. In contrast, U.S. funds experienced a net outflow of $5.05 billion during the same period.
Global sectoral equity funds saw their first net inflow in five weeks, amounting to $526.24 million.
Investors invested $1.13 billion into the technology sector after five weeks of net selling, while the communication services sector saw net purchases of $413 million.
Global bond funds also experienced notable activity, with $19.5 billion in inflows, marking the second inflow in the past four weeks. Government bond funds alone attracted $1.94 billion, their second influx in six weeks, and loan participation funds received $2.24 billion.Commodity funds experienced continued liquidations for the second consecutive week, with investors pulling $293 million from gold and precious metals funds, taking profits following a significant $14.32 billion in net purchases throughout 2024.
Emerging market funds had mixed outcomes. Bond funds ended a four-week selling streak, attracting $2.38 billion in net inflows. On the other hand, equity funds saw significant outflows, with a total of $973 million withdrawn during the week.
