Hedge funds that invest in Greater China are showing their biggest net fund outflows in at least 15 years, according to data for the first seven months of 2022, as investors cut exposure to Chinese assets and await greater policy clarity, reports Reuters. For the January-July period, Greater China-focused hedge funds recorded outflows of $5.6 billion and inflows of $2.01 billion, according to Eurekahedge data from With Intelligence.
The $3.6 billion year-to-date net outflow is larger than any full-year outflows since the hedge fund database began compiling such data in 2008. It also marks a reversal from net inflows of $1.8 billion in 2021 and a hefty $8.7 billion in 2020, when investors piled into a bull run in Chinese markets.
Market observers and analysts say global investors are still keen for exposure to China, the world’s second-largest economy, and to its high-growth companies, which is why redemptions this year have been moderate even after unexpected events such as the Russia-Ukraine war, the sell-off of US-listed China stocks, and long pandemic lockdowns in major Chinese cities.