For the week ended Dec 18, investors divested a net US$37.22 billion (about RM167.71 billion) worth of global equity funds driven by caution and profit-taking, marking the fastest outflow rate in 15 years and the largest amount for a single week since September 2009, reported Reuters on Friday. [US$1=RM4.506]
The US Federal Reserve (Fed) cut rates as expected on Wednesday and signaled two rate cuts in 2025, and projected higher inflation for next year, prompting a sell-off in global equities.
Investors liquidated a robust US$50.2 billion worth of US equity funds, logging the biggest weekly net sales since September 2009. European and Asian funds, however, experienced US$9.21 billion and US$1.74 billion worth of net purchases.
Meanwhile, global sectoral funds experienced their largest weekly outflow in 14 weeks, totaling US$2.65 billion, with the tech and healthcare sectors facing net disposals of US$1.37 billion and US$737 million respectively.
The graphical presentation above shows the net fund inflow and outflow for global equity sectors for the week ended Dec 18 (in US$ million) based on LSEG data. As observed, the financial services and the industrial sectors were the only two equity sectors which experienced net purchases. The information technology sector (navy blue) experienced the biggest net outflow of US$1.37 billion, followed by the healthcare sector (light purple) US$737 million.
Global bond funds continued to attract investor interest for the 52nd consecutive week, securing about US$2.36 billion in net purchases, albeit the lowest amount in eight months.
Corporate and loan participation funds drew substantial inflows of US$2.01 billion and US$1.12 billion, respectively.
Money market funds recorded about US$51.02 billion in net sales, marking the fourth outflow in five weeks.
In the commodities sector, gold and precious metal funds saw US$1.67 billion withdrawn, the largest since July 2022, while energy funds experienced US$215 million in outflows.
According to data covering 29,603 funds, emerging market equities faced increased selling pressure, with equity funds recording their sharpest net outflow in about a year at US$5.27 billion, and emerging market bond funds also seeing US$710 million in net outflows.
