Mutual Funds – The Flying Dutchman – How mutual funds are positioned across Asia

Foreign investor sentiment has dipped sharply, with FIIs withdrawing over USD7bn of funds so far from Asian equities in 2016 (up to 24 January). This is the highest fund outflow recorded in January since the 2008 global financial crisis.

* FIIs have withdrawn funds worth USD7bn in January, the worst calendar start in the last 7 years.

* Mutual funds took a more defensive stance in December – China’s fund weightings dropped to five-year lows

* India and Taiwan most preferred markets; Telecoms least preferred sector

Foreign institutional investor (FII) flows : The start to the New Year has been rather challenging for the Asian equities. Lacklustre macro numbers and RMB volatility accompanied by a further dip in oil prices have increased uncertainty in the equity markets. Foreign investor sentiment has dipped sharply, with FIIs withdrawing over USD7bn of funds so far from Asian equities in 2016 (up to 24 January). This is the highest fund outflow recorded in January since the 2008 global financial crisis.

FIIs have been net sellers across the Asian markets, with Korea (USD2.4bn) and Taiwan (USD2.4bn), two markets geared to Chinese demand, witnessing the largest outflows. The Philippines (USD97m) has seen the smallest outflow (but then it is also the smallest market in the region).

Mutual funds flow : Mutual funds have also seen withdrawals. EPFR Global tracked funds withdrew USD1.2bn from Asia ex Japan equities in the last 4 weeks (ending 20 January 2016)

Mutual fund holdings: The following charts illustrate how mutual funds – all funds and global-mandated funds – are positioned across the region as of end-December 2015.