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Bonds News

Russian stock fund outflows at 9 weeks-EPFR

NEW YORK, Sept 5 (Reuters) - Russian equity funds had a ninth consecutive week of cash outflows amid concerns over property rights, Boston-based fund tracker EPFR Global said on Friday.

According to the data for the week ending Sept. 3, investors pulled $45.8 million out of Russian equities.

Recent harsh criticism from Prime Minister Vladimir Putin against coal company Mechel, harassment of non-Russian managers at oil company TNK-BP, the flexing of Russia’s military might in Georgia and its drawn-out removal of forces has left foreign investors shaken.

“No real surprise. If there is any surprise it is that people are not taking their money out faster given the pretty clear evidence of any hopes that (President Dmitry) Medvedev will moderate Putin or do much to protect property rights,” said Cameron Brandt, global markets analyst at EPFR.

There is no clear pattern in the week’s data, Brandt said, noting that money largely went into more conservative fund groups such as money market funds and U.S. equities.

Money market funds took in a net total $13.24 billion for the week while U.S. bond funds in total had a net cash inflow of $116.6 million. High-yield bond funds suffered $111.2 million in redemptions.

U.S. stock funds net cash inflow totaled $5.6 billion in the latest period during which time the benchmark American Standard & Poor's 500 stock index fell 0.52 percent .SPX.

BRIGHT SPOTS, DOLLAR STRENGTH

The Asia ex-Japan stock funds sector was another bright spot, taking in net new cash of $55.9 million. Pacific region funds took in a net $15.2 million. Sector funds, led once more by financial stocks, had a net cash inflow of $1.5 billion.

Financial sector stock funds took in a net $1.44 billion while energy funds had a net cash inflow of $290.2 million and commodities/materials funds had a net cash inflow of $35.9 million.

“Commodity funds taking in cash was a bit of a surprise given the strength of the dollar. They tend to be used as a hedge against dollar weakness,” Brandt said.

The dollar rose 1.34 percent in the latest period against a basket of currencies .DXY, extending a two month trend.

Year-to-date net cash flows for the EMEA (Europe, Middle East and Africa) fund sector fell into the negative column for the first time since February, Brandt said.

“That was the only major emerging markets fund group that had attracted some new money year-to-date,” he said.

The EMEA equity funds had a net cash outflow of $329.8 million in the latest reporting period bring the cumulative outflow of cash year-to-date to $103 million.

Overall long-only dedicated emerging market funds suffered outflows of $492.8 million in the latest week while year-to-date outflows total $26.3 billion. In the latest period the benchmark Morgan Stanley Capital International emerging markets stock index fell 4.38 percent .MSCIEF.

U.S. dollar strength didn’t help emerging market bond funds.

U.S. dollar-denominated emerging market bonds continued to suffer outflows with redemptions of $44.9 million while local currency denominated funds had outflows of $71.7 million. Blended funds had redemptions of $59.9 million.

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