Investors fuel up EM and developed market equity funds
Investors pumped a net $1.52 billion into developed and emerging markets equity funds tracked by EmergingPortfolio.com Fund Research (EPFR) in the week ending September 15. Rising share prices globally, lower oil prices and solid economic data that was not too strong as to spark worries of rapid monetary tightening helped to encourage investors back into equity funds after six straight weeks of outflows. And the continuing rally in emerging markets debt helped the Emerging Market Bond Funds to their sixth straight week of net inflows.
EPFR tracks equity funds with $1.06 trillion in assets on a weekly basis and fixed income funds with assets of $97 billion. The firm collects flows and allocations data directly from about 7,000 funds with $3 trillion in assets registered in the world’s major fund domiciles, including the US, Luxembourg, Ireland, UK, Caymans, Guernsey, etc. As a result, EPFR’s asset coverage of international developed and emerging market fund groups is the largest and most diverse among fund trackers and more accurately represents global institutional investor sentiment.
Equity Fund Flows*Cumulative 2004 net fund flows by fund category to Sept 15
The combined Emerging Market Equity Funds tracked by EPFR with $106.6 billion of total assets received $349.2 million of fresh money. And even the diversified Global Emerging Markets (GEM) Funds enjoyed inflows for the first time since the week ending July 7. These funds took in $109 million from investors, reducing their year to date outflows to $5.38 billion. Asia ex-Japan Equity Funds enjoyed their fourth straight solid week of interest from capital sources by taking in an additional $154.8 million. These funds have received $528.7 million in the last four weeks, increasing YTD total net inflows to $3.3 billion, or nearly 13% of their beginning of year total assets. Latin America Equity Funds have received net inflows for five straight weeks and the week’s $20.2 million of inflows gives the fund group net inflows of $5.6 million so far this year while EMEA Equity Funds have received inflows for seven weeks running and are the flows leader among EM equity funds in percentage terms: the $1.6 billion of YTD inflows amounts to 19.6% of their total assets.
The runaway fund group leader in terms of total value of inflows are the Global/International Equity Funds. The 1,150 funds tracked by EPFR with $246.7 billion of assets have absorbed $11.2 billion of new money so far this year, representing a little more than 5% of their total assets at the beginning of 2004.
The YTD leaders in percentage terms are the Japan Equity Funds, with net inflows of a whopping $8.87 billion, or 54.4% of their beginning of year total assets. These 205 funds with $27.8 billion in assets tracked weekly by EPFR saw outflows of $39 million in the latest week. It was a modest loss considering the previous week these funds took in $325 million of new money.
US Equity Funds received net inflows for the first time in seven weeks, taking in $847.3 million of net investor contributions during the week. EPFR tracks 2,150 US Equity Funds with $609 billion in assets on a weekly basis. YTD these funds have taken in only $902 million of net inflows.
As European share prices have hit 10-week highs and the euro has held its ground against the dollar, investors have seen fit to squirrel away some money into the Europe Equity Funds for two consecutive weeks. These funds took in $109.2 million in the latest week but have had outflows of $838.5 million year to date.
A surge in the supply of emerging markets debt during early September did nothing to depress the appetite of investors for this asset class. The 249 dedicated Emerging Markets Bond Funds tracked by EPFR posted net inflows for the sixth straight week as nearly $2.4 billion worth of new issues from Brazil, Turkey and the Philippines hit global markets.
For the week ending September 15 the EPFR-tracked EM bond funds - which currently have $17 billion worth of assets under management - took in $33 million. Since August 5 these funds have pulled in a net $322 million and inflows on a year to date basis stand at $516.9 million.
Furthermore, strong demand for the higher quality debt that these funds rotated into during April and May was reflected in their portfolios, which posted a collective gain for the seventh straight week. During that run the value of the fund’s collective portfolios has climbed by $690 million.
Emerging markets debt continues to benefit for the current perception that US interest rates, and hence the return on safer US debt instruments, will not rise rapidly in the foreseeable future. As a result, investors have shifted their attention back to the higher yields available in the emerging markets.
Improving fundamentals in key markets, confirmed by a slew of ratings upgrades, has made it easier for investors to swallow the risk that comes with this asset class. Venezuela and Brazil are the latest countries to have their credit ratings upgraded. Russia aside, the recent political, policy and macroeconomic news has been supportive. Brazil (strong GDP growth), Turkey (efforts to converge on EU membership), Venezuela (post-referendum stability) and India (better than expected 2004-05 budget) have all contributed to the generally positive sentiment.Finally, Global Bond Funds tracked by EPFR posted net inflows of $143.7 million, their seventh straight week of net investor contributions. These 252 funds with $81 billion in assets have enjoyed net inflows of $3.58 billion so far this year, amounting for 4.9% of their total assets.
Investors pumped a net $1.52 billion into developed and emerging markets equity funds tracked by EmergingPortfolio.com Fund Research (EPFR) in the week ending September 15. Rising share prices globally, lower oil prices and solid economic data that was not too strong as to spark worries of rapid monetary tightening helped to encourage investors back into equity funds after six straight weeks of outflows. And the continuing rally in emerging markets debt helped the Emerging Market Bond Funds to their sixth straight week of net inflows.
EPFR tracks equity funds with $1.06 trillion in assets on a weekly basis and fixed income funds with assets of $97 billion. The firm collects flows and allocations data directly from about 7,000 funds with $3 trillion in assets registered in the world’s major fund domiciles, including the US, Luxembourg, Ireland, UK, Caymans, Guernsey, etc. As a result, EPFR’s asset coverage of international developed and emerging market fund groups is the largest and most diverse among fund trackers and more accurately represents global institutional investor sentiment.
Equity Fund Flows*Cumulative 2004 net fund flows by fund category to Sept 15
The combined Emerging Market Equity Funds tracked by EPFR with $106.6 billion of total assets received $349.2 million of fresh money. And even the diversified Global Emerging Markets (GEM) Funds enjoyed inflows for the first time since the week ending July 7. These funds took in $109 million from investors, reducing their year to date outflows to $5.38 billion. Asia ex-Japan Equity Funds enjoyed their fourth straight solid week of interest from capital sources by taking in an additional $154.8 million. These funds have received $528.7 million in the last four weeks, increasing YTD total net inflows to $3.3 billion, or nearly 13% of their beginning of year total assets. Latin America Equity Funds have received net inflows for five straight weeks and the week’s $20.2 million of inflows gives the fund group net inflows of $5.6 million so far this year while EMEA Equity Funds have received inflows for seven weeks running and are the flows leader among EM equity funds in percentage terms: the $1.6 billion of YTD inflows amounts to 19.6% of their total assets.
The runaway fund group leader in terms of total value of inflows are the Global/International Equity Funds. The 1,150 funds tracked by EPFR with $246.7 billion of assets have absorbed $11.2 billion of new money so far this year, representing a little more than 5% of their total assets at the beginning of 2004.
The YTD leaders in percentage terms are the Japan Equity Funds, with net inflows of a whopping $8.87 billion, or 54.4% of their beginning of year total assets. These 205 funds with $27.8 billion in assets tracked weekly by EPFR saw outflows of $39 million in the latest week. It was a modest loss considering the previous week these funds took in $325 million of new money.
US Equity Funds received net inflows for the first time in seven weeks, taking in $847.3 million of net investor contributions during the week. EPFR tracks 2,150 US Equity Funds with $609 billion in assets on a weekly basis. YTD these funds have taken in only $902 million of net inflows.
As European share prices have hit 10-week highs and the euro has held its ground against the dollar, investors have seen fit to squirrel away some money into the Europe Equity Funds for two consecutive weeks. These funds took in $109.2 million in the latest week but have had outflows of $838.5 million year to date.
A surge in the supply of emerging markets debt during early September did nothing to depress the appetite of investors for this asset class. The 249 dedicated Emerging Markets Bond Funds tracked by EPFR posted net inflows for the sixth straight week as nearly $2.4 billion worth of new issues from Brazil, Turkey and the Philippines hit global markets.
For the week ending September 15 the EPFR-tracked EM bond funds - which currently have $17 billion worth of assets under management - took in $33 million. Since August 5 these funds have pulled in a net $322 million and inflows on a year to date basis stand at $516.9 million.
Furthermore, strong demand for the higher quality debt that these funds rotated into during April and May was reflected in their portfolios, which posted a collective gain for the seventh straight week. During that run the value of the fund’s collective portfolios has climbed by $690 million.
Emerging markets debt continues to benefit for the current perception that US interest rates, and hence the return on safer US debt instruments, will not rise rapidly in the foreseeable future. As a result, investors have shifted their attention back to the higher yields available in the emerging markets.
Improving fundamentals in key markets, confirmed by a slew of ratings upgrades, has made it easier for investors to swallow the risk that comes with this asset class. Venezuela and Brazil are the latest countries to have their credit ratings upgraded. Russia aside, the recent political, policy and macroeconomic news has been supportive. Brazil (strong GDP growth), Turkey (efforts to converge on EU membership), Venezuela (post-referendum stability) and India (better than expected 2004-05 budget) have all contributed to the generally positive sentiment.Finally, Global Bond Funds tracked by EPFR posted net inflows of $143.7 million, their seventh straight week of net investor contributions. These 252 funds with $81 billion in assets have enjoyed net inflows of $3.58 billion so far this year, amounting for 4.9% of their total assets.
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