Investors see beyond the US to take Asian funds
Investors have sold US shares and piled up into Asian equity funds, because Trump’s administrative tariffs threw clouds over the view of US growth and whether for years to get profits in the world in the US market might be attractive to the end.
The net flow to the equity funds traded in the stock exchange in Asia reached $ 8.45 billion for three weeks ended May 7, the highest in about seven months, LSEG Lipper data which included 844 funds that were globally registered.
Meanwhile, US equity funds recorded the fourth week in succession, a total of $ 43.5 billion until May 7, because President Trump’s Presidential Trade policy had shaken investor confidence.
“There is more awareness about the need for portfolio diversification and density in 7 extraordinary shares, helping the flow to the non-US market including Asia,” said Prashant Bhayani, Head of Investment Officers at BNP Paribas Wealth Management.
This outflow coincides with good performance and new increase in currencies throughout Asia, showing the flow of money that moved to the region and offers additional attractions for foreign buyers.
Assessment and belief that countries can make trading offers or end the beneficiaries of new routes that are opened to avoid US levies also support sentiment.
Gary Tan, a portfolio manager at Allspring Global Investments, has bought several shares in the new ASEAN, which according to him is good.
“After the initial tariff shock in April, investors have invested selectively in the market specifically in the countries where they anticipate positive results from tariff negotiations,” he said.
The widest index of MSCI from Asia-Pacific shares outside Japan (.MiaPJ0000pus) rose more than 4% for this year, while the S&P 500 SPX and Nasdaq IXIC have recorded losses of almost 4% and 7% each.
The price-to-revenue ratio for the next year (PE) for the Malaysian Exchange Benchmark Index, for example, was established at 17.56, with Taiwan TWSE: Taix at 14.64 and S&P 500 at 20.62.
“We think the increasing need for diversification from US assets, the dollar weakens to long -term fair value from time to time, coupled with a lower assessment and lighter position, supporting Asian equity,” said Sunil Koul, a market equity strategy that developed globally at Goldman Sachs.
Source: Reuters
