Investors take EM risk – but signs of caution continue

growthEquity and bond funds investing in the emerging markets saw positive net flows last week following better US economic data and expectations that Spain will seek a bailout sooner rather than later.

The funds tracked by EPFR Global took in over $1 billion (€768 billion) each during the week ending October 17.

High yield bond funds and dividend equity funds also took in over $1 billion, while gold funds posted outflows for the first time since late July.

US equity funds recorded their fourth consecutive week of net redemptions.

The US retail  data encouraged investors to look for returns – but there were still signs of caution.

"Our daily data shows that flows on the equity side did not pick up until later in the week, when the US retail numbers were out, and the fact flows into money market funds hit a 45 week high suggests that investors are still very cautious," says Cameron Brandt, EPFR Global research director.

Overall, bond funds tracked by the data firm took in another $8.4 billion, which took year-to-date inflows into record setting territory.

All-equity funds posted a net outflow of $1.2 billion while money market funds attracted $23.1 billion.

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