Investors in Asia demonstrated the biggest reversal of sentiment towards fixed-income funds in 2023, according to data provided by funds network Calastone.
In its latest Global Fund Flow Data report, Calastone reports that Asian investors allocated US$9.4 billion into fixed income strategies in 2023.
This was in sharp contrast to the previous year when investors in the region pulled $7.3 billion from fixed income funds.
According to Calastone, this represents the biggest reversal in investor sentiment from any region and for any asset class in 2023.
There was also a modest gain in equity fund inflows from Asian investors which also ran counter to trends elsewhere. Whereas the UK and Europe saw clear net outflows, Asian investors produced $1.1 billion in net inflows with Hong Kong investors playing a pivotal role.
According to Julian Christopher, head of Asia at Calastone, the figures demonstrate the “agility and foresight” of Asia investors.
“We have observed a decisive shift to quickly capitalise on attractive yields in fixed income in anticipation of interest rate reductions across the world’s major economies,” said Christopher.
“At the same time, investors have been more willing to maintain equity fund exposure despite market volatility – likely to their benefit into the end of the year. Looking forward into 2024, we expect trading volumes to remain high as investors navigate a very uncertain economic and geopolitical environment.
“Fixed income will likely stay in hot demand, and we will continue to monitor how equity fund flows progress over 2024.”
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