With investors moving away from funds exposed to Europe and emerging markets, outflows from emerging market equity funds dipped to $2 billion in March, according to a report by EPFR. These funds instead moved to focus on the US and the Japan-based funds.
According to EPFR, emerging market equity funds had a stellar start this year as they pulled in $32.5 billion in the first two months of 2013.
However, in a sharp contrast, the outflows from emerging market equity funds since the beginning of March touched $2 billion as investors shifted their attention and money from funds offering exposure to European and emerging markets to those focusing on the US and Japan.
“Once again the BRICS (Brazil, Russia, India and China) theme stood out among the main emerging markets fund groups for the wrong reasons. Dedicated BRIC equity funds have now posted outflows 107 of the 119 weeks since the beginning of 2011” .
EPFR Global-Tracked Developed Markets Equity Funds ended March having enjoyed their best quarter on record as money poured into the US, Japan and the diversified Global Equity Funds. Meanwhile, flows into Asia, minus Japan, equity find were driven by optimism about China in the first 8 weeks of the year.
“But fears of the new leadership will move aggressively to curb excesses in the banking and property sectors, even at the cost of some growth, prompted investors to pull back in March and focus their attention on some of the smaller markets,” it said
As per data compiled by the firm, flows into major diversified developed markets fund group, Global Equity Funds, consistently exceeded the $1 billion mark as they took in fresh money every week of the quarter.
