China's $4 Billion Fund Liquidation Leaves Traders Guessing
- Funds are believed to be part of China’s ‘National Team’
- Mixed signals on state support as Chinese stocks tumble
Two funds linked to the Chinese government sold all their holdings of stocks and bonds in the third quarter without explaining why, leaving investors to guess at the implications for the country’s turbulent financial markets.
Withdrawals from the CM Fengqing Flexible Allocation Fund and E Fund Ruihui Flexible Fund caused their combined assets to shrink to 296 million yuan ($43 million) at the end of September, from the equivalent of $4.5 billion in June, according to quarterly statements dated Wednesday. What remains are bank deposits and other unspecified assets. Both funds, described by state media as vehicles for China’s 2015 stock-market rescue, said that 99 percent of their units were redeemed during the quarter. They didn’t provide details on who pulled the money and why.