Japan equity funds have suffered record outflows in the past week as traders and investors braced for the country’s snap elections on Sunday.

According to EPFR Global, investors withdrew $4.4bn from funds focusing on Japanese equities in the week to Wednesday, the largest net outflow since the research group began tracking data in 2002.

The withdrawals came even as Japanese equity markets marched to new highs in the anticipation of a victory by prime minister Shinzo Abe.

Many market participants, having been burnt by high-profile polling snafus in recent years, have opted to be defensive ahead of the vote.

“We are thinking Abe will get what Theresa May wanted, but did not get,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors. “People are worried about elections because polls have often been incorrect.”

Mr Gokhman added that the investment stakes are likely higher if Mr Abe loses than if he wins, given the sharp gains for Japanese equities.

Tokyo’s Nikkei 225 equity index, for example, closed higher for 13th straight day on Thursday, marking its longest winning streak since 1988. The benchmark Topix index, which is based on Japanese companies’ market capitalisation, finished Thursday up 0.3 per cent, marking its ninth straight positive close.

“If Abe does win, it is fully priced in. If he loses, you have a correction,” Mr Gokhman said. “If you are a tactical trader, it makes some sense to take a little bit out of your Japanese position and put it on the sidelines until after the election results.”

Market participants also booked profits last week on South Korean equities, where net outflows totalled $630m, the largest amount since the week of April 20 2016, EPFR said. South Korea’s Kospi index is up more than 20 per cent this year.

Overall, however, global investors poured a collective $8bn into equity funds with those dedicated to US equities accounting for the biggest share at $7.5bn, a 17-week high.

“It is not surprising,” said Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors. “On the back of all-time record highs, investors continue to plough into equity exposure, especially the US.”

This week, US benchmarks hit fresh highs with Dow Jones Industrial Average breaching the 23,000 mark amid positive US earnings reports. UnitedHealth, the largest insurer in the US, posted upbeat earnings for the third quarter and a positive outlook, while Johnson & Johnson posted upbeat results, too.

On Wednesday, IBM shares had their best day since 2009, adding 9 per cent, after the company signalled that it was returning to growth with revenues declining less than expected.

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