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Yahoo
5 days ago
- Business
- Yahoo
Japanese equity funds log sharpest weekly outflows since 2007
By Gaurav Dogra and Rae Wee (Reuters) -Japanese equity funds logged their largest weekly outflows in nearly 18 years in the week to May 28, as investors either booked profits following a rally fueled by the then-easing U.S.-China trade tensions or turned cautious on earnings potential. According to LSEG Lipper data, Japanese equity funds recorded net outflows of $7.49 billion, marking the largest weekly withdrawal since July 4, 2007. Daisuke Motori, director of manager research at Morningstar Japan, said the outflows from Japanese equity funds in May reflected a familiar pattern, with investors buying during April's dip and selling into the May rebound. Some of the flows could also be due to rebalancing by Japan's massive life insurance and pension firms as they sell rising stocks and buy bonds to maintain asset ratios, analysts said. Another headwind has been the yen, which has appreciated 10% against the U.S. dollar so far this year, potentially eroding export profitability. LSEG data shows analysts have downgraded forward 12-month earnings estimates for Japanese firms by 1.8% over the past 30 days. "Corporate governance is improving, but we think this is unlikely to be a near-term catalyst," said Herald van der Linde, head of equity strategy at Asia Pacific. He noted that while reforms were underway, their impact on profits would take time - return on equity (ROE) in Japan still lagged other major markets. Domestic investors drove almost the entirety of outflows, Lipper data showed, with $7.55 billion pulled from local funds. In contrast, foreign funds recorded $59 million in net inflows. The Daiwa iFreeETF TOPIX, Nikko Listed Index Fund TOPIX, and Nomura NF TOPIX ETF recorded the largest outflows during the week, with redemptions of $2 billion, $1.92 billion, and $1.61 billion, respectively. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Japanese equity funds log sharpest weekly outflows since 2007
By Gaurav Dogra and Rae Wee (Reuters) -Japanese equity funds logged their largest weekly outflows in nearly 18 years in the week to May 28, as investors either booked profits following a rally fueled by the then-easing U.S.-China trade tensions or turned cautious on earnings potential. According to LSEG Lipper data, Japanese equity funds recorded net outflows of $7.49 billion, marking the largest weekly withdrawal since July 4, 2007. Daisuke Motori, director of manager research at Morningstar Japan, said the outflows from Japanese equity funds in May reflected a familiar pattern, with investors buying during April's dip and selling into the May rebound. Some of the flows could also be due to rebalancing by Japan's massive life insurance and pension firms as they sell rising stocks and buy bonds to maintain asset ratios, analysts said. Another headwind has been the yen, which has appreciated 10% against the U.S. dollar so far this year, potentially eroding export profitability. LSEG data shows analysts have downgraded forward 12-month earnings estimates for Japanese firms by 1.8% over the past 30 days. "Corporate governance is improving, but we think this is unlikely to be a near-term catalyst," said Herald van der Linde, head of equity strategy at Asia Pacific. He noted that while reforms were underway, their impact on profits would take time - return on equity (ROE) in Japan still lagged other major markets. Domestic investors drove almost the entirety of outflows, Lipper data showed, with $7.55 billion pulled from local funds. In contrast, foreign funds recorded $59 million in net inflows. The Daiwa iFreeETF TOPIX, Nikko Listed Index Fund TOPIX, and Nomura NF TOPIX ETF recorded the largest outflows during the week, with redemptions of $2 billion, $1.92 billion, and $1.61 billion, respectively.
Reuters
02-05-2025
- Business
- Reuters
Japanese investors raise foreign stock holdings for sixth week on easing trade tensions
May 2 (Reuters) - Japanese investors raised their foreign stock holdings for a sixth straight week as their sustained appetite for overseas equities was further bolstered by signs that the U.S. and China were willing to ease trade tensions. The local investors also viewed last week's stronger yen as an opportunity to enhance their overseas asset positions. The yen reached a seven-month high of 139.86 per dollar before partially reversing its gains. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. Japanese investors allocated a net 133.8 billion yen ($920.85 million) to foreign equities last week, marking their sixth consecutive week of net purchases, according to data from Japan's Ministry of Finance. They also acquired a net 435.2 billion yen in long-term foreign bonds. The MSCI World Index (.MIWD00000PUS), opens new tab climbed to a five-week high of 840.47 on Thursday, supported by progress in U.S.-China tariff negotiations and strong earnings reports from major tech firms. Meanwhile, Japanese equities attracted a net 278.3 billion yen in foreign inflows, the smallest weekly cross-border investment in the past four weeks. Foreign interest in Japanese bonds also cooled, with inflows into long-term Japanese bonds falling to 60 billion yen last week, down sharply from approximately 1 trillion yen in net purchases the previous week. ($1 = 145.3000 yen) Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Janane Venkatraman Our Standards: The Thomson Reuters Trust Principles., opens new tab
Yahoo
24-04-2025
- Business
- Yahoo
Leveraged equity ETFs popular as investors bet on market recovery
By Patturaja Murugaboopathy and Gaurav Dogra (Reuters) -Leveraged equity exchange-traded funds have seen a surge in inflows this month as some investors seek to position for amplified gains when markets recover from a selloff induced by U.S. President Donald Trump's trade tariffs. According to LSEG Lipper data, leveraged equity funds have received inflows of $10.95 billion so far this month, already surpassing a 5-year high of $9.2 billion recorded last month. The previous peak was in March 2020, when markets were pummelled by the COVID crisis. Leveraged equity funds are designed to deliver multiples of the daily returns of an underlying index such as S&P 500 or Nasdaq 100. They are especially popular among retail investors who want to avoid futures markets, where volatility can trigger margin calls or forced selling if prices fall. Since Trump announced reciprocal tariffs on April 2, the MSCI World Index is down more than 3%, while the S&P 500 and the Nasdaq indexes are down 5% each. Losses were steeper initially but there has been a recovery in markets after his decision to pause those tariffs by 90 days. Rob Kane, director of alternative investments at Commonwealth Financial Network, said inflows into leveraged ETFs were largely driven by expectations of imminent Federal Reserve rate cuts and the view that tariffs were being used as leverage in broader trade negotiations. "Initial over-reactions driven by investor sentiment have often reversed quickly, and the short-term performance nature of leveraged ETFs, combined with the substantial gains they can generate, makes them a tactical tool for capitalizing on heightened price dislocations," he said. These funds have gained popularity, thanks to the rise of trading platforms such as Robinhood, which offer ease of access to these types of ETFs for retail investors. However, some analysts warned that these funds suffer from performance decay, where returns erode over time due to daily rebalancing and market volatility, making them risky for long-term holding. Vince Stanzoine, chief executive officer at First Information, said leveraged ETFs were not suitable for longer term holdings and the daily resets played havoc with returns, especially when markets were not trending. "In fact professional traders including myself will short X3 leveraged ETF such as TQQQ to benefit from this decay and inefficiencies." (Reporting By Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru;Editing by Vidya Ranganathan and Alison Williams) Sign in to access your portfolio
Zawya
21-03-2025
- Business
- Zawya
Japanese bond inflows surge on US tariff woes, equity selloff
Demand for Japanese bonds surged to a two-year high in the week through March 15, driven by safe-haven appeal due to growing concerns over the potential economic impact from changes in U.S. tariff policies and a broad selloff in equities. Foreigners net bought long-term Japanese bonds worth 3.4 trillion yen ($22.82 billion) in their largest weekly net purchase in two years, data from Japan's Ministry of Finance showed. Short-term Japanese bonds, however, witnessed 2.26 trillion yen worth of outflows, the biggest weekly net foreign sales in nearly seven months. Foreigners also pulled out 1.81 trillion yen from Japanese equities, the highest in a week since September 21. Japanese investors, meanwhile, divested foreign equities worth a net 752.5 billion yen following four consecutive weekly net purchases. They also sold 87.6 billion yen worth of foreign long-term debt securities, but snapped up about 128.7 billion yen worth of short-term bills. ($1 = 148.9900 yen) (Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Varun H K)
