View more on these topics

Equity outflows top £19bn amid China panic

China-Asia-Street-Busy-700x450.jpg

Equities saw their worst weekly outflows on record, as investors pulled $29.5bn (£19bn) in assets in the past seven days.

Data from Bank of America Merrill Lynch shows the outflows are the worst since the data collection began in 2002. Tuesday in particular saw £12.3bn of assets pulled from equities, the second worst since the financial crisis.

Emerging markets suffered the most, with £6.8bn in outflows for the week, the worst redemptions since January 2008. It compounds the outflows over the past four weeks, which are now up to £14.3bn.

Despite China being the cause of much of the outflows, it did not see the largest equity outflows in the emerging markets. Brazil saw 3.7 per cent of its assets pulled in the week, compared to China’s 1.1 per cent. Russia experienced 3.1 per cent of outflows, while India saw outflows of 1.4 per cent.

However, year-to-date China has seen £13.1bn of outflows.

Risk averse investors rushed to cash in the week, amid fears of further contagion from China, as cash saw £14.3bn in inflows in the week. Inflows to cash over the past two months now amount to £78.6bn, which is the largest since December 2013.

Commodities was the only asset class other than cash to make it through the week unscathed, seeing a 1.3 per cent increase in assets.

Credit markets also took a blow in the week, as they saw the largest outflows since the US taper tantrum in June 2013.

Emerging market debt funds saw £2.7bn in outflows, high-yield bond funds saw £3.2bn pulled from funds, while investment-grade bonds saw £2.5bn in outflows.

BAML flows

Recommended

M&G’s Fishwick to take over Somel’s £881m Managed Growth fund

M&G’s multi-asset investment architect Dave Fishwick is to replace Randeep Somel as manager of the £881m M&G Managed Growth fund. Somel, who has been manager of the fund since 2013, will now focus on running the £2.2bn M&G Global Basics fund. M&G says the Managed Growth fund will not change its objectives or policy and […]

UK-Currency-Money-Coin-Pounds-GBP-700x450.jpg

Should investors heed warning over £40bn GARS capacity?

Following Morningstar’s capacity warning of Standard Life Global Absolute Return Strategies fund, is it time for investors to find “smaller” alternatives or continue believing in the current fund’s strategy? Morningstar senior manager research analyst Randal Goldsmith issued a capacity warning to investors in Guy Stern’s GARS fund on Thursday as Standard Life’s flagship vehicle reached £40bn […]

China-Asia-Street-Busy-700x450.jpg

Fidelity’s Yeung: China will attract foreign investors but volatility remains

The decision of Chinese regulators to stop intervening in the equity market and concentrate on opening up capital markets will attract more foreign investors, says Fidelity Worldwide Investment director Catherine Yeung. Yeung says a key aim of the Chinese government is to open up their capital markets, including the currency and local government bond markets. The […]

Rookes-Caroline-MAS-2013-500x320.jpg
9

MAS attacked over ‘waste of time and money’ report

The author of an independent review into the Money Advice Service has slammed the organisation for “wasting time and money” by carrying out a review into whether it replicates the work of other bodies. In March, former Consumer Focus chair Christine Farnish published a Treasury-commissioned report calling for the MAS to be overhauled and to […]

Choose life…

Sarah Scott  – Marketing Consultant, Royal London  This month sees the return of Renton, Sickboy, Begbie and Spud in the sequel to the film Trainspotting. Just over 20 years later, we return to see exactly how life treated the characters whose lifestyle was less than ideal back in 1996. Did they choose a job, choose […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment