Massive inflows into US equities funds occurred in the week leading up to December 27, supported by anticipation of an early rate drop by the Federal Reserve following data indicating further cooling of inflation in November.

Investors bought U.S. stock funds for a net total of $14.57 billion during the week, which was the largest weekly net purchase since June 14, according to LSEG data.

According to U.S. personal consumption data released last Friday, prices in the country decreased in November for the first time in over three and a half years, bringing the annual inflation rate even closer to 3%.

$8.93 billion, $3.63 billion, and $642 million were invested in U.S. large-, small-, and multi-cap funds, respectively; meanwhile, $665 million was taken out of mid-cap funds.

In the meantime, U.S. sectoral equities funds had withdrawals of approximately $1.19 billion, with net selling of $924 million and $721 million in consumer staples and healthcare, respectively.

In contrast, bond funds had a meagre $8 million in inflows following four weeks of outflows.

Net purchases of short/intermediate investment-grade funds and general domestic taxable fixed income funds in the United States totaled $210 million and $1.83 billion, respectively. Short- and intermediate-term government and treasury fund outflows totaled around $1.92 billion.

Additionally, the LSEG data revealed that following two weeks of net selling, American investors bought approximately $9.68 billion worth of money market funds.

(Adapted from Reuters.com)