Global equity funds post their biggest weekly outflow in six weeks
Global equity funds have seen weekly outflows for the first time in six weeks, pressured by rising U.S. Treasury yields and mounting concerns over the U.S. debt burden and tax-cut legislation, following Moody's downgrade of the U.S. sovereign credit rating.
According to LSEG Lipper, global equity funds saw $9.4 billion in net outflows, a sharp reversal from more than $20 billion in inflows the previous week.
U.S. equity funds led the retreat, with $11 billion in redemptions, followed by $4.6 billion from Asian funds. European equity funds, on the other hand, received $5.4 billion in inflows.
"We suspect investors will be more cautious about piling into the U.S. stock market after the turmoil in April, especially given concerns around fiscal policy," said John Higgins, chief markets economist at Capital Economics.
"Those worries have coincided with another surge in long-dated Treasury yields this week following Moody's downgrade of the U.S.' sovereign credit rating and a poorly received 20-year auction," he said.
The 30-year Treasury yield climbed to a 19-month high on Thursday, coming within a few basis points of its highest level since 2007, after the House of Representatives passed a tax-and-spending package that intensified debt concerns.
In contrast to equities, global bond funds attracted $21.6 billion in inflows, indicating that investors see bonds as appealing at current yield levels. U.S. bond funds took in $7.6 billion, European bond funds added $11 billion, and Asian bond funds saw $1.8 billion in net inflows.
By category, U.S. government bond funds received $2.8 billion, U.S. high-yield bond funds drew $1.2 billion, and European corporate bond funds gained $1.5 billion.
Money market funds also rebounded, taking in $18.1 billion, following $34 billion in outflows the previous week.
However, gold and precious metals commodity funds saw $1.7 billion in outflows, marking their third consecutive week of redemptions.
Emerging market (EM) bond funds extended their winning streak with a fourth straight week of inflows, adding $403 million, while EM equity funds posted minor outflows. Still, EM equity funds have attracted $10.6 billion year-to-date, a 43 per cent increase from the same period last year.
"The renewed interest in EM is partially due to the concern people have about the end of U.S. exceptionalism and lack of visibility with regards to U.S. ambition," said Alison Shimada, portfolio manager at Allspring Global Investments.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
10 minutes ago
- CNA
Why Bangkok-born hospitality group Anantara could be Asia's most interesting hotel brand
When the third season of The White Lotus, HBO's cult-favourite dramedy about the darkly entangled lives (and deaths) of guests and staff at an ultra-luxury resort, premiered earlier this year, viewers across Asia, including Singapore, took notice. Sure, much of the initial buzz revolved around Kpop megastar Lalisa Manobal aka Lisa of Blackpink making her acting debut. But let's be honest, we travel junkies were just as excited to recognise the sun-drenched backdrop of iconic Thai tropical escape Koh Samui, popular among long-weekend warriors and barefoot luxury aficionados alike. Spotting familiar sights like the Big Buddha Temple Wat Phra Yai or playing 'Guess the Resort' during each hotel set became something of a jetsetter's pastime. As expected, many scenes were filmed at the Four Seasons Resort Koh Samui. No surprise there, given that the first two seasons were also set at Four Seasons properties in Hawaii and Sicily. But in a plot twist worthy of show creator Mike White, a lesser known but very strategic player in luxury hospitality quietly stole the show. Enter Anantara. The Bangkok-born luxury hotel brand, part of the ever-expanding Minor Hotels portfolio, might just be the breakout star of the season. Three of its properties — Anantara Lawana Koh Samui Resort, Anantara Bophut Koh Samui Resort, and Anantara Mai Khao Phuket Villas — were featured prominently in the series as part of the fictional White Lotus Thailand hotel. (Fun fact: Minor Hotels also owns the Four Seasons Koh Samui.) The timing could not have been better for William 'Bill' Heinecke, the 75-year-old American-born, naturalised Thai billionaire founder behind Minor Hotels. With luxury travel in Asia booming globally, Heinecke shows no sign of slowing down. He stepped down as chief executive officer of Minor International five years ago but continues to be deeply involved in the company's hotel expansion strategy with a strong focus on growth and post-pandemic recovery. He started his company even before he turned 18 (hence its name Minor) dabbling in advertising and cleaning services before finding his passion in hospitality. Today, Minor Hotels is a global hospitality group operating over 560 hotels, resorts and residences in 58 countries with brands including Anantara, Avani, Oaks and Tivoli. In 2018 he bought over the Madrid-owned NH Hotel group of premium and luxury hotels, tripling the group's portfolio and solidifying its European footprint. This acquisition, while visionary, also meant that when the pandemic hit just two years later, there was much more at stake. The group racked up losses of over US$1 billion (S$1.29 billion) in 2020 and 2021 due to lockdowns and travel restrictions. But he held firm and now that travel is in full swing once again, the company's increased presence has led to even more brand name recognition around the world. At the same time, he has also always believed in playing to his strengths, reinforcing the group's presence in Asia, which already includes properties across various hospitality brands in Thailand, Vietnam, Indonesia, Sri Lanka, India, China, Maldives and the Middle East. The group plans to add 200 more hotels by the end of 2026, of which about 100 will be in Asia. 'We are already pretty well covered in Asia, with the exception of places like Singapore, Hong Kong and Japan,' he said. 'So, it is obviously a major focus for us to try to get some of those other areas that we are not yet in.' View this post on Instagram A post shared by Anantara Jewel Bagh Jaipur Hotel (@anantarajaipur) In fact, Minor Hotels recently debuted in India with Anantara in Jaipur and aims to have 50 properties in the next 10 years. The company is also growing in China where it plans to open two more hotels to add to its current five. A new Anantara is also opening in Kota Kinabalu this December and the group is inching closer to that elusive goal: A hotel in Japan. 'We are working very hard on it, and it is high on our priorities. I hope by this time next year, we will at least have something announced,' he shared. A hotel is under construction in Singapore too. 'It will be an Avani located close to Chinatown and will be a bit more lifestyle-focused, which will suit the market well. There will be a rooftop dining venue, and it promises to be a fun destination,' he said. One of the global trends driving growth is the rising demand for meaningful, immersive experiences. 'Anantara has become an experiential brand. After COVID-19, we are seeing so many people who want to experience different cultures in foreign lands and we are honoured that they have chosen Anantara,' he said. For instance, at the Anantara Golden Triangle Elephant Camp & Resort, guests get to sleep under the stars in transparent bubble lodges and participate in encounters with rescued elephants. The Anantara Ubud Bali Resort offers a traditional Balinese ritual called Melukat that can be performed at a 1,000-year-old temple while guests may go snorkelling with manta rays at the Anantara Kihavah Maldives Villas. 'These are all very special to me, because each experience has been created to bring alive the culture of the various countries we are in,' said Heinecke. This is all part of what Heinecke calls 'soft power'. He said: 'Everybody has adopted what South Korea pioneered and are finding storytelling and experiences a great way to hook travellers on a destination.' The lifelong entrepreneur credits his longevity to passion and play — fun is as much a business strategy as it is a personal credo. His pursuits include dining, collecting vintage and supercars and flying planes and helicopters. These have ultimately led to varied business ventures such as MJets, an aircraft charter company and Minor Beverages, the food and beverage arm of the company that owns Thai-based The Pizza Company as well as global franchises like Benihana teppanyaki, Swensens and Sizzler. His love for cool wheels and frequent participation in car rallies also inspired him to spearhead the Anantara Concorso Roma, the revival of a 100-year-old car parade that used to take place in Rome. It was initially slated to happen in April this year but had to be postponed to 2026 because of Pope Francis' death. Acknowledging some disappointment, he said: 'The outpouring of grief for the Pope was just so much that it did not seem appropriate to do anything except postpone the concorso.' But true to his never-say-die spirit, he added, 'You cannot worry about the things you cannot control so I only look forward with enthusiasm and optimism for the event next year.' Ever the maverick, he does not shy away from left-field investments that raise eyebrows at the boardroom table. Case in point: His decision to bring Pop Mart, the wildly popular Chinese toy brand, to Thailand in 2023. He was fascinated by the concept of blind box toys but at that point, the brand had yet to explode in popularity. 'I don't think our board was very excited about the prospects at the time,' he said with a laugh. But he knew he was on to something because of the devoted collectors he met. By the time Blackpink's Lisa popularised the brand's Labubu bag charm, setting off an international craze for Pop Mart's products, his stores in Thailand were well positioned to take advantage of the frenzy. View this post on Instagram A post shared by LISA (@lalalalisa_m) Next, he is off to check out the Anantara property in Ubud — and knowing him, he is already dreaming up his next unexpected move.
CNA
25 minutes ago
- CNA
Liberal Lee Jae-myung wins South Korea presidency in martial law 'judgment day'
SEOUL: South Korea's liberal party candidate, Lee Jae-myung, was elected president in Tuesday's (Jun 3) snap election, six months to the day after he evaded military cordons to vote against a shock martial law decree imposed by his ousted predecessor. Lee's victory stands to usher in a political sea change in Asia's fourth-largest economy, after the backlash against the martial law brought down Yoon Suk Yeol, the conservative outsider who narrowly beat Lee in the 2022 election. Nearly 80 percent of South Korea's 44.39 million eligible voters cast their ballots, the highest turnout for a presidential election in the country since 1997, with Lee terming the polls "judgment day" against Yoon's martial law and the People Power Party's failure to distance itself from that decision. With more than 99 percent of the votes counted, the Democratic Party's Lee stood at 49.3 percent to PPP candidate Kim Moon-soo's 41.3 percent, according to National Election Commission data. A subdued Kim conceded the race and congratulated Lee in brief remarks to reporters. Lee had long been favoured to win, and his supporters erupted in cheers as exit polls by the country's major broadcasters showed him defeating Kim by wide margins. In a brief speech to supporters gathered outside parliament after the polls closed, Lee said he would fulfil the duties of the office and bring unity to the country. "We can overcome this temporary difficulty with the combined strength of our people, who have great capabilities," he said. He also vowed to revive the economy and seek peace with nuclear-armed North Korea through dialogue and strength. The martial law decree and the six months of ensuing turmoil, which saw three different acting presidents and multiple criminal insurrection trials for Yoon and several top officials, marked a stunning political self-destruction for the former leader and effectively handed the presidency to his main rival. Yoon was impeached by the Lee-led parliament, then removed from office by the Constitutional Court in April, less than three years into his five-year term, triggering the snap election that now stands to remake the country's political leadership and foreign policies of a key US ally. Lee has accused the PPP of having condoned the martial law attempt by not fighting harder to thwart it and even trying to save Yoon's presidency. Kim was Yoon's labour minister when the former president declared martial law on Dec 3. "I was here on Dec 3 after martial was declared and December 14 when Yoon was impeached," said Choi Mi-jeong, 55, a science teacher who gathered outside parliament to hear Lee speak. "Now Lee Jae-myung is becoming president. I hope he will become a leader who supports ordinary people, not vested interests, not a small number of riches." US State Department spokesperson Tammy Bruce told a briefing that Washington was awaiting final certification before commenting. Official results were expected to be certified by the National Election Commission on Wednesday morning after ballots are sorted and counted by machine, then triple-checked by election officials by hand to verify accuracy. Just hours later, the inauguration ceremony is planned. NEED FOR CHANGE Park Chan-dae, acting leader of Lee's Democratic Party, told KBS that the projections suggest voters rejected the martial law attempt and are hoping for an improvement in their livelihoods. "I think people made a fiery judgment against the insurrection regime," he said. The winner must tackle challenges including a society deeply scarred by divisions made more obvious since the attempt at military rule, and an export-heavy economy reeling from unpredictable protectionist moves by the United States, a major trading partner and a security ally. Both Lee and Kim pledged change for the country, saying a political system and economic model set up during its rise as a budding democracy and industrial power are no longer fit for purpose. Their proposals for investment in innovation and technology often overlapped, but Lee advocated more equity and help for mid- to low-income families while Kim campaigned on giving businesses more freedom from regulations and labour strife. Lee is expected to be more conciliatory toward China and North Korea, but has pledged to continue the Yoon-era engagement with Japan. Kim branded Lee a "dictator" and his Democratic Party a "monster," warning if the former human rights lawyer becomes president, nothing will stop them from working together to amend laws simply because they do not like them. 'POLARISED' "The economy has gotten so much worse since Dec 3, not just for me but I hear that from everybody," Kim Kwang-ma, 81, said. "And we as a people have become so polarised... I wish we could come together so that Korea can develop again." There were no female candidates running in Tuesday's election for the first time in 18 years. Despite polls showing wide gaps between young men and women, gender equality was not among the key policy issues put forward during this election, a stark contrast from the 2022 vote. "One thing I am a bit frustrated about with mainstream candidates whether Lee Jae-myung or other conservative candidates is they lack policy on women or minority groups," said Kwon Seo-hyun, 18, a university freshman and first-time voter who went out to the streets for anti-Yoon protests following his martial law.
CNA
33 minutes ago
- CNA
Commentary: US speech at Shangri-La Dialogue hit the right notes – but talk is cheap
SINGAPORE: Since the first Shangri-La Dialogue (SLD) in 2002, every sitting United States Defense Secretary has delivered an address at the summit to explain their strategic vision for the region and reassure US allies and partners. Pete Hegseth continued this long tradition with his speech on Saturday (May 31) at this year's edition of the security forum. Taken at face value, his speech hit all the right notes. But talk is cheap. His domestic talking points, his insistence that Asia spend more on defence, and inconsistencies between his statements and US actions may raise more questions than answers. BRINGING MAGA TO ASIA 'America is proud to be back in the Indo-Pacific – and we're here to stay,' Mr Hegseth proclaimed. Yet many points hinted at him not just addressing audiences in Singapore, but back in Washington too. On one hand, talking about how the US defence establishment is improving its capabilities, from raising the defence budget to over US$1 trillion to investing in American shipbuilding, supports his assertion that America is 're-establishing deterrence around the world' by building 'credible deterrence' at home. His proclamation that Washington is shunning its past 'moralistic and preachy approach' was even likely welcomed by some Southeast Asian officials in the room, given past efforts to tout liberal values were met with a mixed response. However, not all these domestic references were welcomed by international audiences. References to an 'invasion of 21 million illegals' and US President Donald Trump's electoral victory, for example, are targeted at the MAGA (Make America Great Again) crowd. An allusion to 'taking back the Panama Canal' was likely met with concern by smaller countries. Dismissing climate change as something that was 'preached' by previous governments, while politically popular with the MAGA base, underplayed what many regional governments consider an existential security issue. Perhaps the clearest sign that Mr Hegseth had his mind on a domestic audience were the worrying statements made about China. In years past, Washington has claimed to engage the region on its own merits, refraining from calling out China directly. In the Biden era, China was generally framed as a 'serious competitor' with whom cooperation was necessary, with the term 'threat' reserved for North Korea and more recently, Russia. Even under Trump 1.0, officials tended to criticise 'threatening' policies and actions. Yet, Mr Hegseth seemingly discarded this facade, explicitly calling China a threat. Mr Hegseth also claimed that an invasion of Taiwan 'could be imminent,' even as Director of National Intelligence Tulsi Gabbard said – on the same day after his speech – China does not want a war. While not surprising, this stridently anti-China stance raises concerns about how the US might engage Southeast Asia. The apparent gulf between what Southeast Asian governments and Washington consider important, including a confrontational approach to China and dismissal of climate change, may hinder cooperation going forward. INSISTENCE THAT ALLIES AND PARTNERS DO MORE ON DEFENCE US officials have traditionally called on European counterparts to bear a greater portion of the financial burden for their security. This time, YetMr Hegseth called for US Asian allies and partners in Asia to follow suit with 5 per cent of their gross domestic product. No country in Asia currently spends that much on defence. According to the SIPRI military expenditure database, most ASEAN countries spent less than 1.5 per cent of their GDP on defence in 2024. Even Japan and South Korea which have been actively modernising their militaries spent 1.4 per cent and 2.6 per cent respectively. Singapore is the outlier with roughly 3 per cent, still well below Mr Hegseth's expectations. This is not to say that Asian countries are neglecting their defence capabilities. SIPRI data show that ASEAN military expenditures rose from US$20.3 billion in 2000 to US$48.3 billion in 2024. But it is unlikely that Washington's demand for 5 per cent will ever be achieved. Doing so would require a dramatic reworking of government budgets and legislation, along with potential political unrest trouble asif guns are seen to be prioritised over butternecessities and infrastructure. The flipside is that Washington may pressure Asian allies that do not spend enough – including with the pledge of US protection itself. After all, as US President Donald Trump remarked on the election trail, he would encourage Moscow to do ' whatever the hell they want ' to NATO members who do not spend enough on defence. WHAT AMERICA SAYS AND WHAT IT DOES There are also inconsistencies between Mr Hegseth's words and the US' recent actions. Most leaders in the region would welcome his acknowledgment of the 'geographic necessity' of economic cooperation with China, for example. Or promising to work with regional governments as 'partners, not dependents.' Yet, Washington has levied tariffs universally on its 'partners', including countries with whom America has signed free trade agreements. Washington is also pressuring countries such as Malaysia to Vietnam to enforce rules of origin to cut down on transshipments of Chinese goods. The inconsistencies deepen the more you look. Mr Hegseth criticised China for a 'lack of respect for neighbours' but offered no explanation for how this is different from US ambitions in Greenland and Canada. He raised, as he did in Manila and Munich, that the Indo-Pacific is America's 'priority theatre,' but did not address concerns that munitions are being redirected to the Middle East to support US strikes on the Houthis. At the core of many of these concerns is the question: Is the US serious about its pivot to Asia? The idea of a pivot was first mooted in the Obama administration, but Washington has struggled to make this concrete amid crises in the Middle East and Europe. Just as Mr Hegseth invoked Singapore's founding prime minister, Mr Lee Kuan Yew, in his speech, it would be helpful for US officials to recall Mr Lee's thoughts on America's strengths and weaknesses from a decade ago. While America's 'creativity, resilience and innovative spirit' allow it to confront and overcome its core problems, the US cannot simply treat Asia like a movie that it can pause and resume at will. 'It does not work like that,' he said. 'If the United States wants to substantially affect the strategic evolution of Asia, it cannot come and go.' Yes, talk is cheap. It is now up to the US to practise what it preaches and convince the region of its credibility.
