Money still leaving China-focused funds

Added 11th August 2016

One year after the surprise yuan devaluation and subsequent market crash, $4.5bn has flowed out of funds focused on China equities, according to data from Morningstar.

Money still leaving China-focused funds

The August 11 2015 devaluation of the yuan and the global market crash that followed appears to have had a prolonged impact on both China equity and bond funds.

Total outflows since August 1 2015 for equity-focused funds were $4.5bn, for RMB bond funds, $667m and for onshore bonds $582m. 

The data is for funds available for sale in Hong Kong, Japan, the Philippines, Taiwan and Singapore, as well as the region of sale referred to as "global cross-border".

 China equity   (-$4.52bn) 
 RMB bonds  (-$667m)
 Onshore bonds   (-$582m)

Capital outflows for the period 1 August 2015 - 30 July 2016.

Source: Morningstar

 

Monthly performance since August 2015

Source: Morningstar

 

China equity funds haven’t had positive net inflows since October 2015 and the asset class has lost $300m-$600m every month for the last seven months.

Bond funds fared slightly better but were still negative. RMB bond funds have had negative outflows every month since August 2015, the data shows.

Onshore bonds had one month of inflows ($6m in March 2016) but the capital being pulled out appears to be easing. In July this year, only $3m exited onshore bond funds.

Although the data is for investors globally, Chinese investors have also been moving their own money offshore into foreign assets due to concerns over a falling currency and slowing growth at home.

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