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Comfort with China exceeds $1 trillion
Comfort with China exceeds $1 trillion

At the turn of the century, investing in China was viewed as a risky proposition. Foreign access to a notoriously volatile, retail-driven equity market was heavily restricted. The lack of a credible regulatory framework and legal protections deterred US venture capitalists from making direct investments in Chinese companies. In many cases, Chinese banks and the country’s fledgling private equity industry also balked. So, when Chinese technology firm Alibaba received its first $25 million investment from Goldman Sachs in 1999, investors sat up and took notice.

Global Navigator: Investors batten down hatches | 3Q2022
Global Navigator: Investors batten down hatches | 3Q2022

Investors pulled money out of all the major EPFR-tracked fund groups during the final week of June as they closed the books on a quarter that saw inflation in Europe hit record highs, energy prices soar, the US Federal Reserve deliver their biggest rate hike at a single meeting since 1994 and the benchmark S&P Index endure its worst opening half of any year since 1970.

Global Navigator: Investors as solstice approaches
Global Navigator: Investors as solstice approaches

The Northern hemisphere’s summer solstice, which occurs on June 21, marks the day when it is light for the longest period. In the week preceding that date, however, investors could be excused for thinking the solstice marks the period of maximum darkness. The US Federal Reserve’s first 75-basis points rate hike since 1994, Russia’s invasion of Ukraine moving into its 17th week, Chinese authorities scrambling to contain a ‘ferocious’ outbreak of Covid in Beijing and an emergency meeting of the European Central Bank (ECB) kept global markets firmly on the back foot during the week ending June 15.

Global Navigator: Investors test the floor for US assets
Global Navigator: Investors test the floor for US assets

Although the flow of unsettling developments continued in late May – will Covid-19 pass the baton to Monkeypox? – investors recovered some of their appetite for exposure to US assets. The week ending May 26 saw EPFR-tracked Equity Funds snap their longest redemption streak since 3Q19 thanks to the biggest flows into US Equity Funds since the second week of March while US Bond Funds posted only their second inflow during the past eight weeks.

Global Navigator: China, Locked down but not out
Global Navigator: China, Locked down but not out

As key US indexes closed their books on a month that saw the Nasdaq record its biggest drop since October 2008, investors seeking to escape market volatility turned to cash and to Chinese equity. Flows into EPFR-tracked Money Market Funds hit a 27-week high during the fourth week of April while China Equity Funds recorded their 15th inflow in the 17-weeks year-to-date and their biggest since late January.

Sector Rotation: Post-Covid still in the future
Sector Rotation: Post-Covid still in the future

Flows and allocations to different sectors and sector-related fund groups over the past 14 months have been marked by conviction, record inflows – and sharp changes of direction. EPFR’s data also captures some significant thematic shifts.

Global Navigator: Risk takes a holiday | December
Global Navigator: Risk takes a holiday | December

With major central banks responding to rising inflation, investor focus shifted during the third week of December to the Covid-19 pandemic’s latest iteration and the measures being taken to contain it. Those measures, self-imposed and mandated, promise to dent consumer and business confidence going into the New Year and weighed on flows to many EPFR-tracked fund groups.