Investment Week (April 25)
In the U.S., “sustainable funds suffered their “worst-ever quarter” for redemptions, shedding a record $8.8bn in the first quarter of 2024…. This marked the sixth consecutive month of outflows… and was over five-fold the withdrawals from Japanese sustainable funds, the only other region to record overall redemptions.” The ongoing politicization of ESG investing in the U.S. was among the drivers of the outflows.
Tags: $8.8bn, Japan, Outflows, Politicization, Q1, Redemptions, Suffered, Sustainable funds, U.S., Withdrawals, Worst-ever quarter
New York Times (January 20)
“The money flowing out of funds that invest in companies with environmental, social and governance principles has gone from a trickle to a torrent as investors sour on a sector hit by green-washing concerns, red-state boycotts and boardroom debates.” The phrase ESG “has become increasingly politicized” and has even “been scrubbed from the World Economic Forum’s official program in Davos, Switzerland, after being on the agenda in previous years.”
Tags: Boardroom debates, Boycotts, Davos, ESG, Funds, Green-washing, Invest, Investors, Money, Outflows, Politicized, Red state, Scrubbed, Sour, Torrent
Bloomberg (October 3)
“Global funds further trimmed their Chinese stock holdings in September, extending a relentless selloff and lowering their average position in the country to the lowest level since 2020,” as “outflows surpassed the $3 billion level for a second consecutive month.” The MSCI China Index has now slumped more than 11% in 2023 and is “ on track for a third straight year of losses, which would mark its worst losing streak in two decades.”
Tags: $3 billion, 2020, 2023, China, Global funds, Losing streak, MSCI China Index, Outflows, Selloff, September, Slumped, Stock holdings
Wall Street Journal (December 8)
“The S&P 500 is having its best run in six years, but individual investors are fleeing stock funds at the fastest pace in decades…. Investors have pulled $135.5 billion from U.S. stock-focused mutual funds and exchange-traded funds so far this year, the biggest withdrawals on record.” And, surprisingly, this may be a good sign for the stock market. The outflows show “investors aren’t chasing the stock market’s strong performance…. This suggests major indexes like the S&P 500 still have plenty of room to run after a decadelong rally.”
Tags: ETFs, Fleeing, Investors, Mutual funds, Outflows, Stock funds, U.S., Withdrawals
Financial Times (October 5)
Amidst continuing outflows, emerging markets are much better placed than before the 1997 Asian currency crisis. “Record levels of reserves” should give “troubled countries a window for reform.” Reserves stand roughly 10 times higher than the past crisis. “While no amount of reserves can withstand the loss of market trust, money does buy time. Using reserves to offset capital flight allows central banks temporarily to avoid the classic EM crisis response of tighter monetary policy amid a recession to protect their currency and avoid imported inflation.”
Tags: Asia, Banks, Capital, Crisis, Emerging markets, Market, Monetary policy, Outflows, Recession Inflation, Reform, Reserves
