In the week ending December 3, US investors poured significant capital into money market funds while withdrawing from higher-risk equity funds, adopting a cautious stance ahead of the Federal Reserve's policy announcement on Wednesday.

Data from LSEG Lipper revealed that investors added approximately $104.75 billion to US money market funds during this period, marking the largest weekly net inflow since November 5.

Despite widespread expectations of a Fed rate cut, investors remained wary, with elevated valuations in large-cap tech stocks further driving capital toward safer assets.

US equity funds saw a net outflow of $3.52 billion, marking the second consecutive week of net redemptions.

Mid-cap funds extended their losing streak to seven weeks with $494.92 million in net outflows, while small-cap and large-cap funds recorded net redemptions of $1.18 billion and $476 million, respectively.

However, sector-specific equity funds remained in favor for the second straight week, attracting $510 million in net inflows.

Industrial sector funds and gold/precious metals funds led the gains with inflows of $510 million and $293 million, respectively.

Meanwhile, US bond funds attracted just $314 million, the lowest weekly inflow since October 1.

Short-to-intermediate investment-grade bond funds and municipal bond funds saw inflows of $1.45 billion and $737 million, respectively, while short-to-intermediate government and Treasury funds posted a net outflow of $1.58 billion.