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Fund Flow Weekly Summary

Core Content

This report provides an analysis of global and regional fund flows for the week of March 10–16, 2020, focusing on equity and bond fund movements, foreign and domestic investor behavior, and the performance of specific stocks in the Korean market.

Main Points

• Global Equity Fund Flows:

  • Global equity-type funds experienced a net inflow of USD1,592 million, with a 0.1% share of AUM.
  • Developed markets (DMs) saw a net inflow of USD2,935 million, while Emerging Markets (EMs) had a net inflow of USD1,371 million.
  • North America attracted the highest inflows with USD5,759 million, followed by Western Europe with USD3,950 million outflows and Asia Pacific with USD466 million outflows.
  • Domestic equity funds in South Korea saw a second week of outflows, with non-ETFs experiencing the largest redemptions, totaling KRW1.53 trillion.
  • ETFs gained KRW768.5 billion over four weeks, while leverage funds had redemptions and inverse funds saw inflows.

• Global Bond Fund Flows:

  • Global bond-type funds had a net inflow of USD2,204 million, with a 0.3% share of AUM.
  • Developed markets dominated bond inflows, with Western Europe recording a net inflow of USD1,685 million and North America USD3,112 million.
  • Emerging market bond funds saw a net inflow of USD764 million, with Asia and GEM funds attracting capital.

• Foreign Net Flows in Asia:

  • Foreign investors were net buyers in most Asian equity markets, with notable inflows into China (USD21.1 million), India (USD79.6 million), and Indonesia (USD13.3 million).
  • Korea experienced a net outflow of USD111.9 million, but this was offset by inflows in other markets.
  • The cumulative net flows to EMs and DMs show mixed trends, with EMs experiencing net outflows in some cases and inflows in others.

• Domestic Fund Flows:

  • Domestic equity funds faced continued outflows, particularly non-ETFs, with a total loss of KRW1.53 trillion.
  • ETFs gained KRW768.5 billion over four weeks, indicating a shift in investor preference.
  • Domestic institutional investors showed a mix of inflows and outflows, with some companies attracting significant net buying.

• Top Stocks by Net Buying:

  • Foreign Investors: Korea Aerospace Industries (KRW284.8 billion), Hyundai Heavy Industries (KRW33.8 billion), and others.
  • Local Institutional Investors: Amorepacific (KRW39.4 billion), Hana Financial Group (KRW29.6 billion), and Samsung ElectroMechanics (KRW17.9 billion).

Key Information

• Risk-on sentiment is building globally as the US Fed signals it will raise rates only twice this year.
• Emerging markets are turning to net inflows, with China and Latin America leading the trend.
• Western Europe experienced a net inflow in bond funds, while equity funds had a net outflow.
• Kospi nearing 2,000 points contributed to domestic equity fund outflows.
• ETFs are gaining traction, with inflows over non-ETFs, suggesting a shift in investment strategy.
• Foreign investors are showing a preference for certain Asian markets, with varying levels of participation across regions.

Structure

• Global Equity-type Fund Flows: Overview of regional equity fund inflows and outflows.
• Global Bond-type Fund Flows: Summary of bond fund movements and their implications.
• Foreign Net Flows in Equities into and out of Asia: Detailed analysis of foreign investment trends in Asian markets.
• Domestic Fund Flows: Focus on domestic equity fund performance and ETF dynamics.
• Weekly Net Flows and Relative Weightings: Visual and numerical representation of fund flows and their proportion in the market.

Notes

• All figures are based on the week of March 10–16, 2020, and the beginning of the week's AUM.
• The report is for informational purposes only and does not constitute investment advice.
• Data sources include EPFR, Bloomberg, KRX, KFIA, and Samsung Securities.