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Asian fund groups feeling the chill from the coronavirus epidemic

Year-to-date flows into EPFR-tracked Bond Funds pushed over the $155 billion mark during the third week of February as mutual fund investors remain reluctant to chase the returns being delivered by equity markets. Uncertainty about the full impact on global growth of the Wuhan coronavirus, the focus of retiring baby boomers on capital preservation and the US Federal reserve’s recent statement that its current monetary policy is ‘appropriate’ are among the current reasons for the muted response to the record highs being posted by major equities indexes.

Those investors that are buying into the latest rally by US and other equity markets are either opting for broad, diversified exposure or, in the case of the US, focusing on the sector – technology – that is leading the charge. Global Equity and Technology Sector Funds both rank among the 15 fund groups that have attracted the biggest amounts of fresh money YTD.

Absent from that list are fund groups with Asian mandates, which have predictably struggled as investors try to get a fix on the scope and trajectory of the coronavirus outbreak. The week ending Feb. 19 saw Korea Equity Funds post record-setting outflows, China Equity Funds experience net redemptions for the second time in the past three weeks and Japan Equity Funds record consecutive weekly outflows for the first time YTD.

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