Global equity funds attracted significant inflows of about US$12.9 billion in the week to 10 December, marking the largest weekly net addition in over a month, according to recent data from Reuters-based market tracking. Investors added to global equity and sector funds as they positioned ahead of potential central-bank policy moves and rates outlook shifts.

The surge in inflows was driven largely by European funds, which accounted for roughly US$6.4 billion of net purchases, while U.S. and Asian funds also saw notable but smaller inflows in the same period. Sector allocations showed increased investor interest in metals & mining, utilities and industrials, reflecting a diversification approach amid uncertain macro dynamics.

Analysts suggest that the Federal Reserve’s recent rate cut — coupled with mixed signals on the pace of future cuts — has encouraged investors to rebalance portfolios, favouring risk assets while maintaining caution on duration and credit exposure. Equities have historically responded to rate easing with bullish momentum, but sustained inflows depend on economic data and inflation trends.

The inflows also come against a backdrop of slowing global trade growth and heightened geopolitical risks, which have prompted some investors to reassess hedging strategies and focus on sectors with defensive characteristics. Broad-based participation suggests confidence in near-term equity performance, even as macro uncertainty persists.

Market watchers say continued fund inflows could lend support to equity markets heading into early 2026, provided that central banks strike a balance between supporting growth and managing inflation — an outcome that remains far from certain.

Source: Reuters.