MUMBAI: Emerging market equity funds clocked net outflows during the last week of July— the seventh time in eight weeks, according to the latest report by Emerging markets Portfolio Funds Research (EPFR).
Fund flows into Asia (excluding Japan) equity funds were robust, but this was offset by outflows from Europe Middle East Africa (EMEA), Latin America and the diversified Global Emerging Markets (GEM) equity funds.
Appetite for exposure to the bigger individual markets was again the main driver of flows into Asia (ex-Japan) equity funds, with China equity funds absorbing a net $476 mn for the week ending July 30 and India equity funds accounting for another $117 mn.
At the same time, investor sentiment towards Taiwan has cooled, the EPFR report says. Taiwan Country Funds have recorded six straight weeks of outflows as investors are worried about slowing export orders.
Latin America equity funds recorded their eighth successive week of net outflows, and EMEA equity funds their fifth successive week. Investors are fretting about the impact of slowing global growth on the demand for the commodities these regions export, the EPFR report said.
Those concerns also hit fund groups geared to individual markets: outflows from Russia Country Funds hit their highest level, in percentage terms, since early March 2007. US equity funds posted net inflows for the fifth time in seven weeks while Europe equity funds posted their first two week winning streak since April on the back of strong flows into exchange traded funds (ETFs). Japan equity funds, however, suffered net redemptions for the second time in three weeks as Japanese consumer confidence slipped to a 26-year low, the EPFR report said.
Flows into US equity funds, which totalled a net $5.1 bn, were once again driven by Large and Small Cap Blend ETFs. Consumer confidence in Japan is also at odds with the cautious optimism displayed in recent weeks by foreign portfolio investors.
“Energy-driven inflation, while it may drive some of the country’s vast pool of savings out of low yielding bonds, savings accounts and futons into Japan’s equity markets, has banished the last traces of the fragile rebound in domestic consumption we saw last year,” notes EPFR Global senior analyst Cameron Brandt.
A combination of short covering and another bout of anxiety about bank balance sheets hit Financial Sector Funds in late July, with investors removing a net $933 mn from these funds. Investors also pulled $279 mn out of the best performing sector fund group, Energy Sector Funds, after a month that saw the average price of crude oil and natural gas drop 9.6% and 32% respectively.
Fresh doubts about US, Europe and Asian growth prospects kept the pressure on Commodity Sector Funds, although they did post modest inflows, and spurred fresh outflows from Real Estate Sector Funds.
Equity funds records net outflows in July
Economic Times, India
Fund flows into Asia (excluding Japan) equity funds were robust, but this was offset by outflows from Europe Middle East Africa (EMEA), Latin America and the diversified Global Emerging Markets (GEM) equity funds.
Appetite for exposure to the bigger individual markets was again the main driver of flows into Asia (ex-Japan) equity funds, with China equity funds absorbing a net $476 mn for the week ending July 30 and India equity funds accounting for another $117 mn.
At the same time, investor sentiment towards Taiwan has cooled, the EPFR report says. Taiwan Country Funds have recorded six straight weeks of outflows as investors are worried about slowing export orders.
Latin America equity funds recorded their eighth successive week of net outflows, and EMEA equity funds their fifth successive week. Investors are fretting about the impact of slowing global growth on the demand for the commodities these regions export, the EPFR report said.
Those concerns also hit fund groups geared to individual markets: outflows from Russia Country Funds hit their highest level, in percentage terms, since early March 2007. US equity funds posted net inflows for the fifth time in seven weeks while Europe equity funds posted their first two week winning streak since April on the back of strong flows into exchange traded funds (ETFs). Japan equity funds, however, suffered net redemptions for the second time in three weeks as Japanese consumer confidence slipped to a 26-year low, the EPFR report said.
Flows into US equity funds, which totalled a net $5.1 bn, were once again driven by Large and Small Cap Blend ETFs. Consumer confidence in Japan is also at odds with the cautious optimism displayed in recent weeks by foreign portfolio investors.
“Energy-driven inflation, while it may drive some of the country’s vast pool of savings out of low yielding bonds, savings accounts and futons into Japan’s equity markets, has banished the last traces of the fragile rebound in domestic consumption we saw last year,” notes EPFR Global senior analyst Cameron Brandt.
A combination of short covering and another bout of anxiety about bank balance sheets hit Financial Sector Funds in late July, with investors removing a net $933 mn from these funds. Investors also pulled $279 mn out of the best performing sector fund group, Energy Sector Funds, after a month that saw the average price of crude oil and natural gas drop 9.6% and 32% respectively.
Fresh doubts about US, Europe and Asian growth prospects kept the pressure on Commodity Sector Funds, although they did post modest inflows, and spurred fresh outflows from Real Estate Sector Funds.
Equity funds records net outflows in July
Economic Times, India
