Emerging market funds attract $3.5 bn in a week: report

Emerging markets have attracted $3.5 billion or over 70% of total fresh capital invested in the equity funds across the world during the week ended November 2, global fund-tracking agency EPFR has said.

Besides, India-focussed funds witnessed their largest weekly inflow in about a year, EPFR said in its weekly fund report, without specifying the exact amount for these funds.

Most of such funds invest in India as FIIs (Foreign Institutional Investors) and the capital flows through this route are a key factor in the stock market trends here.

As per the data available with capital market regulator Sebi, FIIs made a net investment of $680 million in Indian equities during the week ended November 2.

In its report, EPFR said that equity funds dedicated to global markets saw net inflows of $4.9 bilion during the week ended November 2, while emerging markets equity funds collectively took in $3.5 billion.

This was the biggest inflow for emerging markets equity funds since early April.

"The optimism generated by last week's plan to contain the Eurozone debt crisis did not last long. But, while it did, it had a marked impact on flows into some of the fund groups hit hard by the dramatic decline in risk appetite in August and September," EPFR said.

It noted that equity funds-dedicated to BRIC countries (Brazil, Russia, India, China) collectively saw net outflow during the week under review. However, the India-focussed funds snapped their 15-week outflow streaks.

For the week ended November 2, India-focused equity funds registered their biggest retail investor inflow since mid-December 2010, EPFR said, but did not disclose the amount absorbed by these funds.

Besides, Latin America equity funds attracted fresh capital for the first time since late July and flows into Asia excluding Japan equity funds climbed to a 17-week high.

In contrast, equity funds focused to Japan witnessed an outflow of $620 million--the most since middle of the second quarter, 2010, due to rising yen.

"With corporate earnings continuing to reflect the competitive strains imposed by the strength of the yen, and the timing and funding of reconstruction efforts still being debated by lawmakers, over $1.4 billion has flowed out of this fund group since mid-September," EPFR said.

In the sectors, commodity funds attracted $438 million in inflows although energy funds suffered net redemptions of $667 million.