LONDON, Oct 1 (Reuters) - Soaring share prices and rising
risk appetite boosted inflows into global equity funds in the
last week of the third quarter, keeping emerging markets funds
on track for a record-setting year, EPFR Global said on Friday.
Redemptions from money market funds totalled $5.2 billion in
the last week of September with such outflows slowing
discernibly during the third quarter.
"Year-to-date, flow data for the first nine months of the
year showed little change in the overall pattern that has been
in place since 2Q09: strong flows into bond funds of all stripes
and a strong preference among equity investors for emerging
markets exposure," said EPFR.
Since the start of 2009, investors have removed nearly $1
trillion from money market funds and the exodus this year could
still easily eclipse 2009's outflow record of $512 billion.
In the final week of September, bond funds pulled in another
$4.31 billion while equity funds absorbed a net $4.6 billion.
Flows into emerging markets equity funds hit an 11-month high.
EMERGING MARKETS
Geographically diversified funds mandated to invest in all
emerging markets ended September with their 18th consecutive
week of net inflows, bringing year-to-date flows to 87 percent
of last year's record $44.2 billion.
Asia ex-Japan equity funds absorbed over $1.5 billion for
the second week running, and Latin America Equity Funds posted
their biggest weekly inflow since the fourth quarter last year.
Inflows into Latin America equity funds extended their
longest winning run this month since the last quarter of 2009,
underpinned by interest in the $67 billion share issue of
Brazil's Petrobras <PETR4.SA>.
While the commodities theme helped Brazil-focused equity
funds attract a 48-week high of $348 million, there was a marked
shift in investor interest towards smaller markets with Chile-,
Peru- and Colombia-focused equity funds attracting above average
inflows.
"A similar shift was evident among investors in emerging
Europe, Africa and the Middle East, with Turkey equity funds
absorbing more than twice the amount of new money as Russia
equity funds during the third quarter," EPFR said.
Africa regional equity funds are on track for a record
setting year, although the third quarter saw them post their
biggest weekly outflow since the second quarter last year.
Flows into dedicated BRIC equity funds continue to dwindle.
"In 2009, these funds accounted for 12 percent of the total
money absorbed by all global emerging market equity Funds. This
year their share is only 2 percent," EPFR said.
GLOBAL BOND FUNDS
Flows into EPFR Global-tracked bond funds during the third
quarter averaged over $6 billion a week, down from over $9
billion a week during the first half of the year, but remained
remarkably consistent.
DEVELOPED MARKET EQUITY FUNDS
The final week of the third quarter saw three of the five
EPFR Global-tracked developed markets equity fund groups post
inflows. In the third quarter, this group saw an outflow of more
than $44 billion.
Fresh money absorbed by U.S. equity funds this month flowed
into Exchange Traded Funds (ETF), a trend often associated with
short term efforts to capture the arbitrage opportunities
presented by the quarterly rebalancing of these funds.
Equity Fund Groups 3Q10 net inflows (outflows) in US$mln
Fund groups 3Q net flows 9months flows 9 months flows
2010 2009
GEM 22,978 38,771 25,783
Asia ex-Japan 6,342 9,478 19,671
Latin America 106 (2,177) 7,471
EMEA 792 3,360 247
All EM funds 30,218 49,432 53,173
US (27,510) (49,250) (62,587)
Japan (3,757) (1,628) (5,996)
Western Europe (612) (15,251) (1,649)
Global (12,599) (14,778) (7,719)
Pacific 363 1,968 820
All DM funds (44,115) (78,939) (77,131)
Money Market (10,812) (496,066) (413,712)
(Reporting by Sebastian Tong and Natsuko Waki; Editing by
Toby Chopra)
