Global investors have been focused lately on the likely implications of the latest round of US monetary stimulus, with wide expectation that money will continue to flow into Asian equities.
Data suggest that emerging market mutual funds, including those invested in Asian markets, have received about 10 per cent of their assets in additional flows over the past four to five months. This contrasts dramatically with funds invested in developed markets, which have struggled to attract any net new flows for the entire year. The prospect of this trend maintaining momentum is influencing mutual fund investor behaviour across Asia.
The prospect of greater fund flows to the region’s equity markets resulting from this stimulus has encouraged investors to look first at their domestic stock market and then to other markets in the region as they consider a change in their asset allocation.