Emerging markets equity funds continued to attract large amounts of fresh money during the second week of May as the commotion around swine flu faded, according to EPFR Global.
Emerging markets equity funds continued to attract large amounts of fresh money during the second week of May as the commotion around swine flu faded, according to EPFR Global.
Emerging markets equity funds tracked by EPFR Global took in another USD3.5bn during the week ending 13 May, extending their current winning streak to ten weeks and total inflows of USD18.6bn since the week of 11 March, while their fixed income counterparts recorded inflows for the fifth week in a row.
Risk appetite appeared to move up another notch, with investors committing USD1.14bn to high yield bond funds, the most since EPFR Global started tracking flows on a weekly basis. Taiwan equity funds and actively managed emerging Europe funds also enjoyed strong weeks.
Funds geared to developed markets enjoyed one of their better weeks year-to-date, with Japan equity funds having their best week since late Q3 2008 and both US and Europe equity funds absorbing over USD2bn.
Overall, equity funds took in USD9.54bn while fixed income funds received inflows of USD4.1bn.
For the third week running, EPFR Global-tracked Asia ex-Japan equity funds posted the biggest inflows among the four major emerging markets equity fund groups, absorbing a net USD1.9bn, with the diversified global emerging markets (GEM) equity funds taking in USD1.18b, Latin America equity funds USD350mand EMEA equity funds USD145m.
The BRICs (Brazil, Russia, India and China) theme, which fell out of favor in the middle of last year, continued its revival with BRICs equity funds posting inflows for the ninth time in the past ten weeks, during which time the funds have received nearly all of their year to date inflows of USD686m, and funds geared to the individual BRICs markets also taking in fresh money.
US equity funds shrugged off the disappointing consumer numbers to record net inflows of USD2.6bn, making it their best week year to date. Actively managed small and mid cap funds and large cap exchange-traded funds attracted the bulk of the new money committed by investors. Overall, however, over USD49bn has been pulled out of this fund group so far this year.
Despite default rates heading towards nine per cent, and expected to hit around 15 per cent going into 2010, high yield bond funds absorbed a record-setting USD1.14bn during the second week of May as investors continue to back their belief that, in light of aggressive action by policymakers around the world, this asset class was oversold last year.
US bond funds also extended their recent winning run, as did balanced funds. Flows into emerging markets bond funds, meanwhile, totalled USD325m while global bond funds managed to absorb USD406m.
The USD1.81bn committed to US bond funds represented the 11th time in the past 14 weeks inflows have exceeded USD1bn and took the amount they have absorbed year-to-date over the USD19bn mark. US municipal bond funds accounted for some 45 per cent of the total inflows into this fund group.
Money market funds recorded only their second week of inflows since early March. But the amount committed represented only 0.02 per cent of assets under management.
