Global funds investing more in China as coronavirus spreads to the rest of the world

In the midst of uncertainties around the coronavirus pandemic, foreign fund managers are “reshuffling” their holdings and putting more money into China stocks.

“Allocations to China are something people are looking to increase,” Todd Willits, head of flow tracking firm EPFR, told CNBC.

As U.S. equities fell sharply in March, allocation to Chinese stocks among more than 800 funds reached almost a quarter of their near $2 trillion in assets under management — or up from about 20% a year ago, according to fund flow data from EPFR.

Market dislocations triggered by the coronavirus crisis have sent more capital into Chinese stocks — and some strategists see this as part of a longer-term trend.

As U.S. stocks plunged to three-year lows in March, allocation to Chinese stocks among more than 800 funds reached nearly a quarter of their nearly $2 trillion in assets under management, according to fund flow data from EPFR. That’s up from about 20% a year ago, and roughly 17% six years ago.

The data covers funds that breaks down holdings into nine categories of stocks listed in mainland China, Hong Kong, Taiwan, the U.S. and Singapore.