Domestic equity funds rake in $81 m

Gobal investors continue to back emerging markets over Europe and US as the Global Emerging Market (GEM) Equity Funds attracted a net inflow of $345.45 million, their third best weekly total this year and the most net inflows received since the first week of February. India equity funds received more than their share of fresh money, raking in $81 million.

In gross, the emerging market equity fund groups combined took in a total of $665.24 million during the week, the strongest demand since the week ending March 9, according to the data released by the Emerging Portfolio Fund Research (EPFR).

Investors pumped in a net $82.8 million into EMEA Equity Funds, bringing their YTD cumulative inflows to $2.53 billion, the most on a percentage of assets basis (17.5 per cent) of all fund groups tracked.

Latin America Equity Funds pulled in a net $31.5 million on the week and increasing the YTD inflows to $716 million, or 14.5 per cent of beginning of year total assets. sia ex-Japan Equity Funds also saw strong inflows, receiving $205.4 million during the week.

"It is an encouraging sign for the asset class that investor interest in diversified emerging markets funds has picked up since recent analysis of our fund flows data shows a correlation between GEM fund flows and emerging markets index performance," says Brad Durham, a managing director of EPFR.

"The analysis shows that every $1 billion inflow into these funds results in an increase of the MSCI EMF Index of 6.8 points, or about 1.2 per cent, over the following week." GEM funds have taken in $1.22 billion of net inflows over the past five weeks.

Meanwhile, global and international equity funds registered outflow of $213.1 million during the week, reducing YTD inflows to $9.96 billion, or 3.3 per cent of total assets.

The US equity funds took in just $151.1 million of inflows, a droplet considering that this fund group contains $844.4 billion in total assets. YTD inflows $1.96 billion amount to only 0.25 per cent of total assets.