Japanese Equity Funds Record Largest Weekly Outflows in 8 Years

Japanese equity funds recorded their largest weekly outflows in nearly 18 years in the week ending May 28, amounting to $7.49 billion.

Investors booked profits from the funds following a stock rally driven by easing US-China trade tensions at the time, amid concerns about future earnings.

Analysts said some of the outflows may also be due to rebalancing by Japan’s large life insurance and pension companies, as they sold rising stocks and bought bonds to maintain asset ratios.

Domestic investors drove most of the outflows, with $7.55 billion withdrawn from domestic funds, while foreign funds recorded net inflows of $59 million.

Three funds—Daiwa Topix, Nikko, and Nomura—received the largest outflows during the week, netting $2 billion, $1.92 billion, and $1.61 billion, respectively.

Daisuke Motori, director of manager research at Morningstar Japan, said outflows from Japanese equity funds in May reflect a familiar pattern, with investors buying during April’s decline and selling during May’s rebound.