Research firm eVestment revealed that the sovereign wealth funds pulled $5.7 bn from stock and bond strategies managed by external asset managers in the second quarter (Q2) of 2018 , according to Reuters.
The firm explained that this is due to the trade tensions that rocked the financial markets.
The resumption of the large-scale sale in the Q2 suggests that this figure was an exception or blip rather than a turning point, especially as it was revised down significantly from preliminary data indicating much higher inflows.
“A combination of low oil prices, low bond yields and volatile stock markets has forced sovereign investors to reduce their exposure to publicly- listed securities in recent years, preferring to increase direct investments and real estate holdings instead,” according to eVestment
eVestment collect data from about 4,400 firms managing money on behalf of institutional investors, meanwhile, it’s figures revealed that the biggest redemptions in the Q2 came from U.S. and global passive equity strategies.
Notably, U.S. passively-managed equity funds lost $2.52 bn, while global passive equity strategies lost $1.12 billion.
Moreover, the global world stocks ended the Q1 of 2018 flat after the U. S escalated a trade war with its key trading partners, prompting investors to take risk.