UNITED States investors took US$837 million out of mutual funds investing in Asia, excluding Japan, in a tidal wave of redemptions during the first quarter of this year.
A report from Salomon Brothers shows this exodus compares with net redemptions of $236 million in the fourth quarter of last year. The chart shows this contrasts starkly with what was happening this time in late 1993 and early 1994.
Salomon predicts the second quarter this year is likely to show stable or improving cash flows, which support growing expectations for better regional stock market performance.
The outflow of funds in the first quarter was split between $118 million from US registered mutuals and offshore outflows of $719 million.
Interestingly, the focus of redemptions in the offshore sector was on four funds, making up 60 per cent of the net outflow total. Total assets of Asia (ex-Japan) funds followed by Lipper Analytical Services was shown as $25.7 billion at the end of the first quarter.
Fund groups also keep launching funds in the sector, with the total rising from 204 to 211 between the start and finish of the first quarter. his is a modest rise compared with the hot go-go fund launches of late 1993.
