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Fund houses shed £475bn amid China woes

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Some of the largest fund houses lost around £475bn in assets in the third quarter, after China falls and continued investor nervousness.

In Q3, $727.7bn (£474.6bn) was wiped off the assets of the fund management buinesses Franklin Templeton, JP Morgan Asset Management, State Street, BlackRock, T Rowe Price, BNY Mellon and State Street, reports the Financial Times.

BlackRock in particular was hit hard, with $215bn being wiped off its balance sheet in the quarter, as the asset manager struggle to cope with the fallout from the China market drops.

More pain could be to come as investors remain nervous and switch out of underperforming asset classes, says consultancy Create Research chief executive Amin Rajan.

Rajan says: “We are going to see a lot of rebalancing. If [investors] do not see a lot of returns in asset class X, they will switch to asset Y.”

Lipper head of UK and Ireland researcg Jake Moeller says: “I would anticipate more outflows. I would expect what has started [following the situation in] China to continue.”

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