UPDATE 1-Money market fund exodus hits 94 pct of '08 inflow-EPFR
(Adds details)
LONDON/NEW YORK, Oct 15 (Reuters) - About 94 percent of the cash that sought safety from the global financial crisis last year has returned to equity and bond markets in 2009, according to data compiled by fund tracker EPFR.
Investors withdrew $28.1 billion from money market funds in the week ending Oct. 14, bringing the year-to-date outflow to $396 billion, EPFR Global said on Thursday.
U.S. equity funds lost $3.49 billion during the same week, despite the Dow Jones Industrial Average .DJI moving back to its 10,000 level, to recorded outflows for the seventh time in the past nine weeks.
Major beneficiaries of the outflows from money market and U.S. equity funds have been emerging-market funds, said EPFR, which tracks globally domiciled funds with $10 trillion in total assets.
Inflows to emerging market stock funds reached a 2009 record in the past week, with global emerging market equity funds absorbing $2.1 billion and EMEA equity funds receiving $358 million to post record weekly inflows.
Appetite for these funds were sharpened after "hopes of increased U.S. and European demand for commodity and other emerging markets exports (were) bolstered by a good start to the third-quarter earnings season and the latest Chinese trade numbers," EPFR said in a statement.
DEBT INFLOWS
Heavy inflows were seen in funds specialized in BRIC countries -- Brazil, Russia, India and China.
Equity funds dedicated to BRIC countries or Russia alone saw their largest weekly inflows for the year, while funds dedicated only to Brazil or to China had their second-best week of the year, according to EPFR data.
Emerging debt funds also benefited from investors' appetite for yield, recording their largest weekly inflows since EPFR started tracking them in 2001.
Weekly inflows to emerging market bond funds have averaged nearly $900 million since the second week of September, EPFR said.
This compares to an average weekly inflow of $283 million during the third quarter this year and $83 million during the second quarter.
The funds tracker added that the focus had shifted back to hard-currency debt rather than local currencies in recent weeks.
High-yield bond funds extended their winning streak to 16 consecutive weeks taking in over $20 billion in the year so far.
Other major bond fund groups also attracted inflows, EPFR said.
U.S. bond funds posted inflows of more than $2 billion for the 10th consecutive week and global bond funds had their fifth straight week of more than $1 billion in inflows.
Flows into U.S. bond funds continue to favor funds focused on municipal and short-term government debt, EPFR added. (Reporting by Sebastian Tong and Walter Brandimarte; Editing by Toby Chopra)
