EM funds see best January since 2006
From News Feb 7 2012 BY: Esther Armstrong
, Senior Reporter
, Portfolio Adviser
Emerging Market equity funds have enjoyed the best start to the year, in terms of fund flows, since 2006 as investors' risk appetite finally returned to the table.
In the final week of January fund flows into EPRF Global-tracked EM equity funds hit their highest level for 43 weeks, with inflows of $3.5bn.
This rounded off a month in which EM equity funds recorded inflows every single day, taking their monthly and year-to-date totals to $11.3bn.
"Flows have again proved a good indicator of changing investor sentiment," said EPFR Global managing director, Brad Durham, "The emerging markets equity funds we track have had their best start in six years - in flow terms - while the average portfolio is, in defiance of many defensive forecasts for the first half of 2012, up around 11%," he added.
Bond funds have also seen a roaring start to the year, with inflows of $7.47bn during the week to 1 February - their biggest weekly inflow since EPFR started recording them in the second quarter of 2002.
Redemptions from other equity funds focused on the US, Europe and Japan kept inflows into the asset class more muted, however, at $1.28bn for the same week.
"Developed market equity funds posted their biggest weekly outflow since the second week of December as European leaders wrestled with Greece's intractable debt problems and the US kicked out some worse-than-expected confidence and housing numbers, thereby giving investors a reason for taking some profits," EPFR Global said.