Investors pull cash from US-based China region equity funds for 8th straight week
- ‘It has to do with the trade anxiety and the impasse between Beijing and Washington,’ an investment analyst says
- US-based China region funds on pace for worst quarterly outflow since third quarter of 2015
Investors have extended their purge of US-based China region equity funds, pulling cash from the sector for the eighth consecutive week – marking the longest negative streak since mid-2016 and overlapping with the deterioration of trade talks between Washington and Beijing, according to new data.
For the week ending June 19, a net US$218.6 million was withdrawn from China region funds sold to US investors, data provider Lipper, a Refinitiv company, reported late on Thursday.
Since April 1, investors have pulled a net US$2.24 billion from China region funds sold in the United States, putting the current quarter on track to be the worst since a net US$3.18 billion was redeemed in the third quarter of 2015, Lipper data shows.
The retreat from Chinese equities coincides with a larger trend of a flight to safety. Funds invested in non-US stocks suffered from nearly US$5 billion in net redemptions. Taxable and non-taxable bond funds, typically viewed as safer havens, pulled in just over US$8 billion in fresh cash.
“It has to do with the trade anxiety and the impasse between Beijing and Washington. This trade embargo, as it goes on, could be a drag on global growth, not just China or the US,” Tom Roseen, head of research services at Lipper, said on Friday.
“People are moving away from focused bets,” he said. “China region funds is a non-diversified portfolio, so people are walking away from that and looking for higher yield and safer havens.
