Strong inflows into Chinese and technology equities
Chinese equity and technology equity funds have both experience large inflows over the last week, and one Chinese technology fund has returned over 9% since the start of the year, according to data.
Chinese equity funds posted the second-largest inflows since EPFR started tracking flows, and according to Bank of America (BofA) Chinese equity inflows accounted for 2.2% of total emerging market inflows.
“Both China and all emerging markets equity funds posted their second largest weekly inflow since EPFR started tracked them, with the latter falling just short of the mark set during the first week of 3Q15 when Chinese authorities were wrestling with a major sell-off in their domestic equity market,” EPFR said.
“Record retail commitments to China equity funds also lifted the retail number for all EM funds into record-setting territory.
“In addition to the money pouring into China equity funds, the latest country allocations data for the diversified global emerging markets (GEM) equity funds shows that, on average, one out of every three dollars they take in is going to buy Chinese equity. Although these funds are steadily increasing their holdings of domestically-listed A shares, Hong Kong-listed H shares and P-chips still account for a bigger average share of their exposure to China.”
Sector wise, technology last week experienced the third highest inflows at US$4.5 billion ($5.8 billion), according to BofA.
Using FE Analytics, Money Management found that the top performing technology focused equity fund was BetaShares – Asia Technology Tigers ETF over the month (9.1%), one year (71.48%), and three years (110.54%).
Performance of technology equity funds over the year to 31 January 2021
Source: FE Analytics
According to its factsheet, the fund had a country allocation of 55% towards China, followed by Taiwan (21.4%), South Korea (18.1%), India (4.9%), and Hong Kong (0.2%).
Sector wise, the fund had the largest allocation towards internet and direct marketing retail (28.2%), semiconductors (18.8%), interactive media and services (17.8%), technology hardware, storage, and peripherals (13.9%), and interactive home entertainment (8.2%).
CFS Wholesale Global Technology and Communications fund followed the BetaShares fund over one year (31.95%) and three year (70.4%) returns. The fund had its highest country allocation towards North America at 80.7%.
Performance of technology equity funds over the three years to 31 January 2021
Source: FE Analytics
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