Chinese funds reduce equity exposure to one-year minimum

Chinese funds reduce equity exposure to one-year minimum

For the next three months Chinese fund managers reduced their suggested equity exposure to the lowest value for more than a year, amid concerns regarding tightening liquidity as well as profit-taking by institutional investors because the year-end is getting closer.

The fund managers cut their suggested equity allocations to approximately 71.9% from 79.4% in November, according to a survey of 8 China-based fund managers, which was conducted this week.

The fund managers have spurred their suggested bond allocations for the nearer three months to 6.9% from 5.6% the previous month.

Additionally, they have also lifted recommended cash allocations to approximately i21.3% for the next three months versus 15% last month.   

Liquidity conditions appear to be a huge concern ahead of the year-end. Besides this investors worry that monetary policy would be tightened in 2018.

The fund managers polled were still mixed on asset allocations for the upcoming month, with three forecasting a cut and just one pointing to a jump, and four suggested the same level of equity exposure.

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