The company BlackRock, which is classified as the largest asset management company in the world, announced the closure of a Chinese offshore stock fund after it was investigated by a Select Committee of the United States House of Representatives for allegedly channeling investments into shares of Chinese companies included on the sanctions list.
The asset firm has decided to close the China Flexible Equity Fund, Denise Voss, president of BlackRock Global Funds (BGF), announced in a letter to shareholders.
The suspended funds come from operations on August 24, when their liquidation value was approximately $21.4 million, according to figures published by the Asia Times.
Last year, its net asset value (NAV) decreased by 30.5%. At the end of last year, it was 25% below its initial level in October 2017.
The president of BlackRock assured that the directors “do not expect to increase significantly more subscriptions in the near future” and continuing to manage the fund with this size will result in a higher investment cost that we believe is not in the best interest of shareholders,” Asia Times published. .
The U.S. House Select Committee on Strategic Competition on Strategic Competition between the United States and the Chinese Communist Party informed BlackRock CEO Larry Fink in late July that his companies were being investigated regarding investments in certain Chinese companies.
Larry Fink, Chairman and CEO of BlackRock. REUTERS/Brendan McDermid/File Photo
The legislators assured that they requested information from BlackRock and the executive director of the American private equity fund company, MSCI, Henry Fernández, about American investments in some 50 Chinese companies.
These companies were blacklisted over accusations of supporting the Chinese military or involvement in alleged human rights abuses.
BlackRock had to issue a statement in which they assured that they comply with all applicable US laws in the management of investments in China.
The investigation in July, just before the president of the United States, Joe Biden, signed an executive order on August 9 that restricts the investment of American funds and companies in China’s semiconductor, quantum computing and artificial intelligence sectors. .
US President Joe Biden, 2023. REUTERS/Evelyn Hockstein/Pool
Earlier this month, BlackRock Inc. chief investment officer of global fixed income Rick Rieder said the cooling labor market supports speculation that the Federal Reserve is done raising rates, making bonds more attractive than they have been in months.
Although U.S. hiring increased in August, the Labor Department report also showed that wage growth slowed and the unemployment rate rose to its highest level since February 2022, the month before the central bank began tighten its monetary policy.
“I think you can use this as another benchmark for the fact that we are seeing increasing slack in the workforce” and this comes “along with falling inflation,” Rieder said Friday on Bloomberg Television. “The Fed should be done. “A little more exposure to interest rates can be supported than has certainly been the case in recent months.”
Two-year Treasury yields fell as much as 11 basis points to 4.75% before erasing the decline, although swap traders are pricing in a less than 50% chance the Federal Reserve will raise rates again in this hardening cycle. Longer-term yields initially fell but soon recovered, with the 10-year bond rising 7 basis points to 4.18%, causing the curve to steepen, although it remains inverted as long-term rates they remain below the short ones.
“We like to keep the initial part,” since, “if you buy commercial paper, etc., you pay around 6%. It’s been incredible. But I think now that can be extended a little further into the curve” and “we’ve been adding something up to the belly of the curve.”
