As trade war talks collapse, investors pull cash from China-region equity funds
- It is the third straight week of net outflows from US-based China-region funds, according to data from Lipper
- Across global markets, non-resident investors have withdrawn a net US$5.3 billion over the past two weeks
The breakdown in trade talks between the United States and China has contributed to investors pulling cash from US-based China region equity funds in the past week, updated data shows.
According to the weekly portfolio flows tracked by Lipper, a division of data provider Refinitiv, investors in US-based funds pulled a net US$690 million out of China-region equity mutual funds, marking the biggest net outflow in exactly three years.
This was the third straight week of net outflows, said Pat Keon, senior research analyst at Lipper. The divestitures reflect a broader trend of funds fleeing equities to seek shelter in lower risk assets and less trade dependent regions
“The net outflows for China region funds have grown from US$60 million to US$124 million to US$690 million over the last three weeks,” Keon said. “This seems to be in direct correlation with the escalation of the US/China trade war over the same time frame.”
Indeed, the latest data for the week ending May 15 overlapped with the unsuccessful conclusion of the 11th round of US-China trade talks.
