Tue, 21 Mar 2023 Today's Paper

Sovereign funds pulled US $ 38bn from global markets in 2016

21 February 2017 12:01 am - 0     - {{hitsCtrl.values.hits}}


REUTERS: Sovereign wealth funds pulled US $ 37.8 billion from global stock and bond markets in 2016, data from research firm eVestment showed, although the fourth quarter flows showed a slowdown in the rate of redemptions.
The oil-backed sovereign wealth funds (SWFs) have been under pressure since the oil prices tumbled from their mid-2014 highs of US $ 115 a barrel, and 2016 marks their third year of net selling.
However, the sovereign investors’ redemptions from third party fund managers have slowed year-on-year, down from US $ 45.7 billion in 2015. The rate of selling steadily reduced over the course of 2016, with fourth quarter redemptions of US $ 4.9 billion, down from a revised US $ 7.2 billion in the third quarter, eVestment said.
This could be related to a rebound in oil prices from a low of US $ 27 a barrel in January 2016 to around US $ 57 a barrel in December after oil producers reached a deal to cut output.

Peter Laurelli, global head of research at eVestment, which collates data from 4,400 firms managing money on behalf of institutional investors, highlighted the correlation between oil prices and flows.
“If you look at when the price of oil began to fall in 2014, along with the rise in strength of the US dollar, that moment coincides very closely with the shift of SWF flows to external institutional managers from positive to negative,” he said.
Redemptions peaked in the third quarter of 2015 at US $ 20.1 billion, though there have been no net inflows since the second quarter 2014.
In the fourth quarter 2016, the biggest redemptions came in US equity and global equity mandates, which saw net outflows of US $ 3.3 billion and US $ 1.1 billion, respectively. Passively-managed emerging market equity mandates lost US $ 1.4 billion.
US and global equity markets have rallied to record levels since Donald Trump was elected as US President in November, but Laurelli said decisions to redeem assets were not short term in nature.
Fixed income mandates, which had attracted a total US $ 2.5 billion of net inflows in the third quarter, switched to net outflows of US $ 13.5 million in the fourth quarter.


  Comments - 0

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment

Wokeism: Is it destructive, or are you afraid of change? A response

In order to critically discuss a movement, we must first understand its etymo

Defeat in Ananthapuram Battle denoted the LTTE’s end

Many battles were fought during the long war between the Sri Lankan armed for

Wokeism: A Weapon of Mass Destruction?

When can one say they’ve had enough of being in a state of ‘wokeness’ a

Fake news fraud using Prabha and family

Members of a dozen Sri Lankan Tamil families gathered in the evening at the r

International Schools’ Athletic Championships 2023