Investors are yanking cash out of exchange-traded funds that invest in China as concern mounts about the investability of the nation’s assets as its property crisis deepens.
(Bloomberg) — Investors are yanking cash out of exchange-traded funds that invest in China as concern mounts about the investability of the nation’s assets as its property crisis deepens.
Money managers withdrew more than $180 million from US-based ETFs with expsoure to Chinese equities in the week ended Sept. 22, contributing to outflows across emerging markets, according to data compiled by Bloomberg. Investors have pulled capital from the iShares MSCI China ETF for five of the past six weeks, signaling rising anxiety over China’s outlook.
“There is a view by some in the market that China is not investable,” said Reggie Browne, a principal at the trading firm GTS, “and the health of China property sector is underperforming and worrisome.”
On Monday, the mainland unit of China Evergrande Group said it failed to repay an onshore bond, adding a new layer of uncertainty to the developer’s future and deepening the concern about the property sector. An MSCI Inc. index of emerging-market shares extended recent losses Monday after wiping out all of their 2023 gains.
Outflows from US-listed emerging market ETFs that invest across developing nations as well as those that target specific countries totaled $225.1 million in the week ended Sept. 22, compared with losses of $203.5 million in the previous week, according to data compiled by Bloomberg.
- Stock ETFs contracted by $30.8 million.
- Bond funds fell by $194.4 million.
- Total assets fell to $302.8 billion from $308.2 billion.
- The MSCI Emerging Markets Index closed down 2.1 percent from the previous week at 964.24 points.
- China/Hong Kong had the biggest outflow, of $189.5 million, following withdrawals from iShares MSCI China.
- South Korea had the biggest inflow, of $47.8 million, led by iShares MSCI South Korea.
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Following are tables detailing net flows for emerging-market ETFs in US dollars. The data include the holdings-weighted allocations from multi-country funds, as well as country-specific funds. Latest and historic flows are allocated using latest fund weightings (figures in USD millions unless otherwise stated):
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Europe, Middle East & Africa
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