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EM funds see best flows in six years

growthEmerging market equity funds reached a 43-week high at the end of January, snapping up $3.5 billion (€2.7 billion), according to EPFR Global, suggesting that asset classes promising better than average returns are gaining popularity despite potentially higher risks.

Meanwhile, high yield bond funds took in another $2.7 billion, while money market funds posted their biggest outflows since August last year.

"Flows have again proved a good indicator of changing investor sentiment," noted Brad Durham, the global managing director. "The emerging markets equity funds we track have had their best start in six years -- in flow terms -- while the average portfolio is, in defiance of many defensive forecasts for the first half of 2012, up around 11%."

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