Investors trimmed their equity fund Holdings and took a cautious stance ahead of the Fed meeting

(1) Global investors reduced their equity fund Holdings in the week ended Jan. 24, with investors taking a cautious stance ahead of the Fed meeting. The meeting is likely to change expectations for the pace and magnitude of rate cuts. (2) Despite this, the surge in global equities limited outflows, and the optimism from Netflix's strong quarterly results and upbeat financial forecasts from semiconductor companies, including Super Micro Computer, played a role. (3) According to the London Stock Exchange Group (LSEG), global equity funds had a net outflow of $2.19 billion that week, the smallest weekly outflow in four weeks. (4) Investors net redeemed approximately $3.04 billion and $2.12 billion of U.S. and European funds, respectively. In contrast, Asian funds attracted net inflows of US$2.35 billion, the third consecutive weekly inflow. (5) Driven by optimism about strong financial forecasts, the technology sector saw inflows of $2.47 billion, the largest weekly inflow since November 22, 2023. Meanwhile, the healthcare and energy sectors were net sellers of $552 million and $593 million, respectively. (6) Bond funds attracted more inflows, with global bond funds seeing inflows of US$9.34 billion, the fifth consecutive week of inflows. Short-term global bond fund inflows of $5.29 billion, the largest inflow since October 11, 2023. High-yield funds saw net inflows of $880 million. (7) At the same time, investors redeemed a net $18.27 billion from money market funds, remaining net sellers for the second consecutive week. (8) In the commodities sector, precious metals funds attracted $209 million, the first weekly inflow in four weeks. Energy funds also bought about $5,400 on a net basis. (9) Data covering 27,956 emerging market funds showed that investors sold a net $2.83 billion worth of equity funds during the week, the largest net sell-off in five weeks. Bond funds also sold a net of about $790 million