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Fund Flow Weekly Summary

Core Content

This document provides an overview of global and regional fund flows for the week ending March 30, 2016, focusing on equity and bond funds. It highlights the weakening of fund inflows, particularly in developed markets (DMs) and emerging markets (EMs), as well as the impact of market movements on domestic and foreign investments.

Main Points

• Global Equity Fund Flows:

  • Global equity-type fund flows showed a net outflow of USD685 million for the week, with the largest outflow in Asia Pacific (USD1.039 billion) and Western Europe (USD1.971 billion).
  • Emerging markets (EMs) saw a net outflow of USD608 million, marking the first time in four weeks.
  • Asia ex Japan had a net outflow of USD1.148 billion, the largest since November 2015.
  • China experienced a significant shift, with a net outflow of USD738 million last week after attracting USD807 million two weeks prior.
  • Korean funds had a net outflow of USD385 million, driven by profit-taking as the Kospi approached 2,000.

• Global Bond Fund Flows:

  • Global bond-type fund flows showed a net outflow of USD624 million, with North America experiencing its first net outflow in 12 weeks.
  • Emerging markets (EMs) had a net inflow of USD379 million, with GEM funds seeing strong inflows.
  • Asia ex Japan had a net outflow of USD231 million, while EMEA had a net outflow of USD15 million.

• Foreign Net Flows in Asia:

  • Foreign investors saw a net outflow in Asia, with the largest being in China (USD822 million).
  • The cumulative net flows for the month showed a net inflow of USD1,746 million into Asia ex Japan, while the net flows for the year were negative in most countries.

• Domestic Fund Flows:

  • Domestic equity funds experienced a net outflow for the fourth consecutive week, totaling KRW2 trillion for the month of March.
  • Institutional investors sold KRW1.2 trillion, while foreign investors sold via program trading, indicating potential continued outflows.

Key Information

• Market Trends:

  • The weakening of market rallies and global policy momentum led to reduced risk appetite, resulting in net exits from both equity and bond funds.
  • Domestic equity flows were heavily influenced by the Kospi approaching 2,000, leading to profit-taking.

• Regional Analysis:

  • Asia: Net outflows were significant, especially in Asia ex Japan and Korea.
  • Western Europe: Net outflows were consistent, with a decline in inflows.
  • North America: A net outflow was observed for the first time in a dozen weeks.
  • EMs: A net outflow occurred for the first time in four weeks, primarily due to weaker inflows to GEM funds.

• Top Stocks by Investor Type:

  • Foreign Investors: Net bought Hite Jinro (KRW66.8 billion), Korea Zinc (KRW35.6 billion), and SK Hynix (KRW31.3 billion) in the MSCI Korea index.
  • Local Institutional Investors: Net bought Samsung Life Insurance (KRW68.7 billion), Posco (KRW36.1 billion), and KT (KRW31.8 billion) in the Kospi 200 index.

Summary Table

Conclusion

The report indicates a shift in fund flows, with both equity and bond funds experiencing net outflows, particularly in developed markets and parts of emerging markets. This is attributed to a reduction in risk appetite and the waning of global policy momentum. Domestic equity funds also saw outflows, with the Kospi nearing key levels prompting profit-taking. Foreign investors were net buyers in some EM stocks, while local institutional investors had a mixed impact across the market.