(Bloomberg) -- Outflows across US exchange-traded funds tracking Chinese equities persisted for a sixth-straight week, as weaker economic data and implications of a Trump victory spooked investors — even before Saturday’s assassination attempt.
The world’s second-largest economy recorded net outflows of $229.4 million from this group of ETFs last week. The KraneShares CSI China Internet fund saw $122 million in outflows, followed by Xtrackers Harvest CSI 300 China A-Shares ETF with $53.62 million and iShares China Large-Cap ETF with $32.36 million.
Economic data from China has fallen short of expectations in the last couple of weeks, keeping investors wary of the nation’s economic outlook. Key economic indicators including inflation, trade and credit data released last week have all damped sentiment, while figures released Monday — showing that GDP expansion was the slowest in five quarters and home prices fell again in June — added to pressure on policymakers to step up support during this week’s Third Plenum in Beijing.
Beyond worries around China’s economic health, renewed bets that former President Donald Trump will win back the White House during November’s elections after a failed assassination attempt over the weekend are fueling concern over tighther policy and more tariffs against the Asian nation.
“The outlook has been further complicated by the increasing possibility of a Trump victory, resulting in investors reevaluating the potential impact of tariff hikes on China’s growth,” said Nenad Dinic, EM equity strategist at Bank Julius Baer & Co. Ltd.
Concerns are mounting over possible declines in exports, depreciation of the renminbi against the greenback and the effectiveness of reactive policy measures in mitigating the negative effects of increased tariffs, according to Dinic. Those risks could escalate further as Trump threatens to raise tariffs on surging Chinese imports if reelected.
Beyond China, there was a small outflow across emerging markets, totaling $4.31 million in the week ended July 12, compared with gains of $272.2 million in the previous week, according to data compiled by Bloomberg. So far this year, inflows have totalled $9.17 billion.
The bright spot lies in Latin America, where the iShares Latin America 40 ETF recorded $59.7 million in inflows on Friday — the highest daily print in over two years.
- Stock ETFs contracted by $83.4 million.
- Bond funds rose by $79.1 million.
- Total assets rose to $361.3 billion from $355 billion.
- The MSCI Emerging Markets Index closed up 1.7 percent from the previous week at 1,123.56 points.
- China/Hong Kong had the biggest outflow, of $229.4 million, following withdrawals from KraneShares CSI China Internet.
- India had the biggest inflow, of $142.4 million, led by WisdomTree India Earnings Fund.
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Following are tables detailing net flows for emerging-market ETFs in US dollars. The data include the holdings-weighted allocations from multi-country funds, as well as country-specific funds. Latest and historic flows are allocated using latest fund weightings (figures in USD millions unless otherwise stated):
Regional Summary
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Americas
Asia Pacific
Europe, Middle East & Africa
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