Two weeks into the year of the Ox, China funds see flows spike

After a two-week influx of fresh money into China Equity Funds totaling $53 billion, the spotlight in mid-October shifted to US Equity Funds as a new corporate earnings season gathered momentum and data suggested that the world’s largest economy is – by some measures – in rude health.

The first week of October saw China’s benchmark stock index do a passable imitation of a roller coaster. It was a different story for flows into dedicated China Equity Funds whose rocket-like trajectory carried these funds and the broader Emerging Markets Equity Fund group into record territory.

Investors anticipating that recent interest rate cuts in North America and Europe will drive a rotation from bonds to stocks, especially emerging markets stocks, were partially vindicated in late September when EPFR-tracked Emerging Markets Equity Funds posted their second-largest weekly inflow of the year.