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For the week ending June 19, a net US$218.6 million was withdrawn from China region funds sold to US investors, data provider Lipper, a Refinitiv company, reported late on Thursday.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.