| In a reversal of the trend seen in October, almost all the US, global and emerging market funds have seen near-record inflows in November.
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| Asia (except Japan) equity funds also received substantial new money from investors. Country funds, focused on China, Taiwan and India have received about half of these weekly inflows.
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| According to Emerging Portfolio Fund Research (EPFR), a Boston-based fund tracking service, equity funds have raked in over $6 billion in net inflows so far in November.
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| The research firm attributes these inflows to the post-US election optimism, lower oil prices and a “rush of funds into non-dollar denominated assets, on weakening US currency that has come as a boon to global and emerging markets equity funds.”
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| For the week-ended November 17, 2004, global and international equity funds tracked by EPFR received almost $825.2 million in fresh investments, a tad lower to the previous week’s $962.8 million - the largest inflow of funds in a week, since September 2003.
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| These funds have taken in an astonishing $14.5 billion of net inflows so far this year, more than three times last year’s $4 billion of net investor contributions received.
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| Flows have also been positive in 20 of the last 22 weeks. The Asia (ex-Japan) equity funds took in $225.8 million for the week ended November 17, compared with the previous week’s $327.6 million - the largest inflow in any single week since early March.
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| According to EPFR “dedicated emerging market equity funds enjoyed their second straight solid week of inflows, taking in a net $743.5 million during the week and returning them to net positive inflows year to date.”
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| In the previous week, these funds took in $825.6 million, the fifth-best weekly total this year. Flows were strong for the second straight week into the diversified Global Emerging Market (GEM) equity funds, which received $410.4 million during the week ending November 17 after the previous week’s $494 million of inflows.
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| The biggest beneficiary, however, was the passively managed iShares MSCI Emerging Markets Index Fund, which by itself attracted $219 million of net inflows for the week.
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| Equity funds from Latin America, Emerging Europe, Middle East and Africa (EMEA) also received healthy inflows last week. EMEA funds have now absorbed $2.01 billion of net inflows from investors in 2004, more than double the $846.7 million received in all of 2003.
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| US Equity Funds took in a net $574 million from investors during the week making it the third consecutive week of inflows. Over the last four weeks, these funds have returned 7.2 per cent and have received $2 billion of inflows that accounts for about all of their year to date total inflows.
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| Japan equity funds and developed Europe equity funds have both received three straight weeks of net inflows. The decline of the dollar against the euro to an all-time low has encouraged investors to plow $714 million over the last three weeks into the Europe funds to minimise their exposure to the dollar.
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| Meanwhile, Japan funds have taken in $282 million of fresh money from investors over the past three weeks, surpassing $9 billion in total net inflows into these funds year to date.
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| Inflows have now added about 55 per cent to the total net assets of these funds this year. Japan funds, tracked weekly by EPFR, have grown in assets from $16.3 billion at the start of 2004 to $29.2 billion at present. |
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