Emerging market funds log $11.2 bn inflows

Emerging market equity funds are set to see record inflows this year.

The 961 dedicated emerging market equity funds (with $122.1 billion in assets) tracked by the Boston-based EmergingPortfolio.com Fund Research (EPFR) have pumped $11.2 billion in new money into these funds in the year till December 17, 2003. That represents a 15 per cent increase in assets from the beginning of this year.

Emerging market equity funds, mandated to invest in emerging markets globally, have thus surpassed the previous record set in 1996, when there were inflows of $10.89 billion.

According to EmergingPortfolio.com, investors have been injecting fresh money into emerging market funds for most of this year due to a number of factors.

These include the fact that 2003 will be the fourth consecutive year where emerging markets have outperformed the developed markets - the MSCI EMF is up 46 per cent year to date compared to the MSCI World Index's 25 per cent return.