LONDON, Sept 13 Inflows to emerging equity funds
rebounded in the past week, rising to the highest since
February, banks said on Friday, citing data from EPFR Global,
while bond funds suffered their 16th week of losses.
Data from the Boston-based fund tracker, released to clients
late on Thursday, showed that in the week to September 11 equity
funds had taken in a net $2.6 billion inflows, after an average
$1 billion weekly loss in the past 10 weeks.
Year-to-date, outflows from the sector now total $13.5
billion, the banks said.
The gains coincide with inflows of $11.3 billion to
developed equity funds, which snapped a three-week losing
streak. Analysts said the gains reflect economic recovery, not
only in the West and Japan, but also in many developing
countries which have posted relatively robust economic data.
Much of the impact of a reining in of U.S. Federal Reserve
stimulus - ending a flood of cheap funds that has boosted many
emerging markets - also looks to have been priced in after a
$4.4 billion loss last week, the biggest in 10 weeks.
"In line with the first signs of a pick up in global growth,
strong inflows returned to EM equity funds," RBS analysts told
clients. "If the trend in growth data continues to improve from
here, we think that the worst may be over in terms of outflows
from emerging equities."
Emerging stocks are up more than 3 percent this
week, their biggest weekly gain since mid-July.
The exodus from emerging debt continued however, with bond
funds seeing outflows of $1.2 billion in the past week, banks
said. But it was the lowest level of net redemptions since
The majority of the outflows, $685 million, were from local
currency debt funds.
Analysts said local debt outflows had exceeded hard currency
ones for five of the last six weeks, attributing this to the
risks of holding assets in weakening emerging currencies.