Taiwan’s mutual-fund balance dropped 4.91 percent last month, as some foreign funds moved out of the local market amid growing global uncertainty, JPMorgan Asset Management Ltd said.
Mutual funds dropped by NT$112 billion (US$3.54 billion) to NT$2.17 trillion, falling below the NT$2.2 trillion mark for the first time in six months, as global funds sought returns in other investment instruments, JPMorgan Taiwan said.
The trend is fueling concern that foreign funds might flow to mature markets ahead of a potential interest rate hike by the US Federal Reserve in December.
“In the past, equity and multi-asset funds gain when currency funds decline, but fund managers prefer to stay on the sideline this time around until the uncertainty stabilizes,” JPMorgan Taiwan said.
Currency funds stood at NT$860.1 billion last month, down 10.46 percent from one month earlier, the fund house said. Altogether, currency funds plunged 14.78 percent for the first nine months.
Equity funds saw a 0.4 percent decline, while onshore and offshore fixed-income products retreated 4.89 percent and 1.82 percent respectively, it said.
The light turnover in the local bourse reflected the waning investment interest.
Mutual funds trimmed another NT$37.16 million worth of local shares yesterday after cutting their positions by NT$365.08 million last month, Taiwan Stock Exchange data showed.
Net pullout accelerated to NT$2.05 billion this month, while foreign funds lowered their positions by NT$514.62 million, according to bourse statistics.
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