Emerging market equity continues to see inflows

EPFR_barchartGlobal emerging market equity funds continued their strong run, posting over $2bn (€1.4bn) in inflows. US and European equity funds also saw positive flows.

According to data provider EPFR Global, equity funds took in a net $7.63bn in the second week of October. Bond funds absorbed $5.7bn over the week and money market funds again posted modest outflows.

Emerging market equity funds again saw solid inflows as investors gravitated to the faster growth rates and appreciating currencies offered by this asset class. All emerging market equity funds combined absorbed more than $60bn of net inflows this year.

Four of the five major EPFR Global-tracked developed markets equity funds posted inflows during period under review. Japan equity funds were the exception, posting outflows for the fifteenth time in the past 16 weeks. US equity funds on the other hand saw a $2bn inflow. Even Europe equity funds managed to post modest inflows.

Flows into the sector funds tracked by EPFR Global were generally subdued during the second week of October as investors digested more mixed economic data from around the world and waited for the outcome of the US legislative elections in early November.

Consumer goods sector funds recorded the biggest inflows, with some of that money seeking to benefit from the boost that cheaper credit and the Christmas shopping season could give this sector. The prospect of Christmas sales, allied to some better than expected earnings reports, also helped technology sector funds take in fresh money for the fourth consecutive week.

Bond funds also had a good week as flows into global bond funds topped the $1bn mark for the fourth consecutive week, with year-to-date inflows moving past the $90bn mark. High yield bond funds extended their current inflow streak to six straight weeks.

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