Post by account_disabled on Feb 25, 2024 0:47:10 GMT -6
Allegations by the US House Select Committee that BlackRock was profiting from investments that help the Chinese military were followed by significant capital outflows in four of the funds mentioned, Morningstar data from August shows. Four of the five BlackRock funds highlighted by the committee experienced capital outflows in August, and three of them saw a significant drop in net flows, according to Morningstar data. The $21.6 billion iShares MSCI Emerging Markets exchange-traded fund saw the largest outflows, losing $billion in August, followed by outflows of $89 million from the $7.6 billion iShares MSCI China ETF. The $290 million iShares MSCI China A ETF had outflows of $14 million, while $2 million net cash came out of the $17 million BlackRock China A Opportunities Fund. This article was previously published by Ignites Asia, a title owned by the FT Group. The iShares MSCI China ETF, iShares MSCI China A ETF and BlackRock China A Opportunities Fund lost percent,percent and minus percent over the year to August 30, respectively, according to Morningstar data.
These funds have investments in 20 Chinese companies that have been identified by the committee as “posing national security risks and acting against US interests.” US lawmakers subsequently sent letters to the Job Function Email Database US financial giant in early August, requesting explanations for its holdings in these blacklisted Chinese companies. However, analysts maintain that the departures were not necessarily driven by political concerns. Jeff Tjornehoj, senior director of fund research at US-based Broadridge, noted that flows into ETFs focused on the China region have been negative in four of the last five months, suggesting the outflows were more of a consequence of the result of a “bad economic situation”. performance” of Chinese stocks. However, he acknowledged that some investors could “shun” these funds to “avoid controversies.” Bryan Armour, head of North American passive strategies research at Morningstar, said some investors chose to sell shares in response to the investigation, but he did not expect the letter to have a "big impact" on the investment community. The growing number of “cracks appearing in China's economy” was a “major catalyst” for capital outflows, he argued.
Many investors flocked to China and emerging market funds when China began to reopen its economy and lift Covid-related restrictions earlier this year,” he said. "As growth targets fell short and risks increased, it is reasonable to expect investors to lose interest in reopening trade with China, especially as developed markets outperformed emerging markets," he added. Gerard partner at Tan Lane Holdings Limited, agreed, saying investors pulled out money because “the risk profile of Chinese stocks has changed.” "Allocators and investors are not immune to the constant headlines about China's trade, property and demographics," he said. BlackRock recently closed a Luxembourg-domiciled China equity fund due to a “lack of new investor interest” amid China's faltering economic recovery and an ongoing slowdown in mainland stocks. The current stock market volatility and the poor performance of stock funds in the market have led to a significant reduction in investors' risk appetite for China-focused stock strategies in many markets. China-focused mutual funds saw outflows of $647 million in the second quarter of this year, compared with net inflows of $1 billion into ex-China emerging market strategies, and the 10 largest China-focused mutual funds have seen its assets shrink by 40 percent.
These funds have investments in 20 Chinese companies that have been identified by the committee as “posing national security risks and acting against US interests.” US lawmakers subsequently sent letters to the Job Function Email Database US financial giant in early August, requesting explanations for its holdings in these blacklisted Chinese companies. However, analysts maintain that the departures were not necessarily driven by political concerns. Jeff Tjornehoj, senior director of fund research at US-based Broadridge, noted that flows into ETFs focused on the China region have been negative in four of the last five months, suggesting the outflows were more of a consequence of the result of a “bad economic situation”. performance” of Chinese stocks. However, he acknowledged that some investors could “shun” these funds to “avoid controversies.” Bryan Armour, head of North American passive strategies research at Morningstar, said some investors chose to sell shares in response to the investigation, but he did not expect the letter to have a "big impact" on the investment community. The growing number of “cracks appearing in China's economy” was a “major catalyst” for capital outflows, he argued.
Many investors flocked to China and emerging market funds when China began to reopen its economy and lift Covid-related restrictions earlier this year,” he said. "As growth targets fell short and risks increased, it is reasonable to expect investors to lose interest in reopening trade with China, especially as developed markets outperformed emerging markets," he added. Gerard partner at Tan Lane Holdings Limited, agreed, saying investors pulled out money because “the risk profile of Chinese stocks has changed.” "Allocators and investors are not immune to the constant headlines about China's trade, property and demographics," he said. BlackRock recently closed a Luxembourg-domiciled China equity fund due to a “lack of new investor interest” amid China's faltering economic recovery and an ongoing slowdown in mainland stocks. The current stock market volatility and the poor performance of stock funds in the market have led to a significant reduction in investors' risk appetite for China-focused stock strategies in many markets. China-focused mutual funds saw outflows of $647 million in the second quarter of this year, compared with net inflows of $1 billion into ex-China emerging market strategies, and the 10 largest China-focused mutual funds have seen its assets shrink by 40 percent.