Emerging market equity, bond funds see over $3 bn redemption

Emerging market bond and equity funds witnessed redemptions that exceeded $3 billion last week as investors remain wary about the outlook of these markets, says a report.

 

According to global fund flow tracker EPFR, the combined redemptions from emerging markets equity and bond funds exceeded $3 billion for the fifth time in the past six weeks.

 

The report noted that China's rapidly changing economic story was again a key factor in the outflows recorded by Asia ex-Japan equity funds for the 13th time in the past 14 weeks.

 

Investors ignored the political uncertainty in Portugal and the downgrading of Italy's credit rating and poured nearly $2 billion into Europe Equity Funds, EPFR said.

 

Meanwhile, optimism about the prospects for US, Japanese and some European companies helped US and Europe equity funds post their biggest weekly inflows since the third quarter of 2011 and second quarter of 2012, respectively.

 

Redemptions from EPFR Global-tracked Gold Funds exceeded $1 billion for the 10th time in the past 15 weeks, while, flows into silver funds, which have stronger links to industrial production trends, did climb to a 20 week high.

 

Overall, EPFR Global-tracked Equity Funds attracted a net $13.6 billion during the week ending July 10 with retail commitments at a 21 week high while Bond Funds recorded outflows of $2.69 billion.