The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Last week marked the worst week for emerging market equity funds since they lost $10.7 billion in outflows during the third week of January.
Outflows from the diversified global emerging markets (GEM) and Asia ex-Japan equity funds both exceeded $1 billion each, with the latter having its second worst week year-to-date, while Latin America equity funds reported outflows of $548 million last week.
Emea equity funds suffered in part because flows into Russia equity funds turned negative after a 10-week, $1.76 billion run of net inflows. The battle for control over oil major BP-TNK has banished much of the recent goodwill generated by new President Dmitry MedvedevÆs remarks in support of property rights and less direct state involvement in the business sector, EPFR Global says.
Asia ex-Japan equity funds, which have now posted outflows for six straight weeks, are being sapped by doubts that many key markets in the region can effectively balance the competing policy goals of a competitive currency for exporters and a monetary policy tight enough to effectively rein in rising inflation.
These concerns have not stopped investors from stepping back in when they believe markets are oversold, however. Funds geared towards Vietnam, whose benchmark equities index fell 22% in the second quarter of 2008, have posted inflows for 10 of the past 14 weeks.
At the country and sub-regional level, Middle East and North Africa equity funds (Mena) extended their notable run, posting inflows every week so far this year, and Vietnam equity funds attracted more contrarian money. But all of the fund groups geared to the Bric (Brazil, Russia, India and China) markets recorded outflows, as did Bric equity funds.
Financial sector funds continued to benefit from rock bottom valuations, hopes for further consolidation and speculation that more sovereign wealth fund money will move into the sector, EPFR Global says. A fifth straight week of positive flows took year-to-date inflows for this group over the $7 billion mark despite owning by far the worst performance numbers of the nine major sector fund groups.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
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