Emerging market funds suck in almost $6 bln in week-EPFR

SINGAPORE, Oct 22 (BestGrowthStock) – Investors poured another $5.8
billion into emerging market funds in the third week of
October, with global emerging market equity funds seeing record
inflows for the second time in three weeks, fund tracker EPFR
said.

Investors also committed $1.4 billion to emerging market
bond funds in the week as they sought shelter from the falling
U.S. dollar and looked for higher yields elsewhere, EPFR said.

Commodity funds also pulled in more than $1 billion.

The flood of money into emerging markets is causing a major
headache for policymakers who worry their surging currencies
will hurt exports, stunting economic growth.

The inflows are also fuelling concerns about asset bubbles
forming in local equity and property markets, complicating
fiscal and monetary policy.

Currency tensions are a key topic of discussion at a G20
finance ministers’ meeting starting on Friday. [ID:TOE69L00U]
[G7/G8]

Overall, global equity funds tracked by EPFR absorbed a net
$4.7 billion for the week while their bond counterparts took in
about $4.7 billion.

Money market funds posted their biggest outflow since the
second week of September as investors sought better returns.

EMERGING MARKET EQUITY FUND FLOWS

Global emerging market equity funds absorbed about $3.8
billion in the week, Boston-based EPFR said. Year-to-date flows
into this fund group now exceed last year’s record $44.2
billion.

Asia ex-Japan, Latin America and EMEA equity funds posted
inflows ranging from $327 million to $981 million.

Dedicated BRIC (Brazil, Russia, India and China) equity
funds had their best week since February, but were again
eclipsed by Frontier equity funds, which pulled in $150
million, a 145-week high. Turkey equity funds saw inflows for
the eighth week.

U.S., GLOBAL, EUROPE, PACIFIC AND JAPAN EQUITY FUNDS

As their economies sputtered, appetite for developed market
equity slowed.

Global equity funds posted their first back-to-back weeks
of inflows since March, while European equity funds saw their
fourth consecutive week of inflows as investors rotated money
from dedicated country to regional fund groups.

But investors pulled a net $1.9 billion out of U.S equity
funds, with modest flows into small cap funds more than offset
by redemptions from large cap blend exchange traded funds.

Japan equity funds saw net redemptions for the 16th time in
the past 17 weeks as the government downgraded its outlook for
the economy and the surging yen weighed on exporters.

SECTOR FUNDS

Year-to-date flows into commodity sector funds topped $19
billion in the week as investors sought to hedge the weaker
dollar and responded to strong Chinese demand.

The other big winner during the latest week were technology
sector funds as a lackluster third-quarter earnings season
showed signs of improvement.

Sector funds in energy, telecoms and utilities saw
outflows.

BOND AND OTHER FIXED INCOME FUNDS

U.S., global and emerging market bond funds all took in
over $1 billion during the week, and year-to-date flows into
all bond funds tracked by EPFR hit $355.7 billion.

With 10 weeks of the year left, flows into emerging market,
global, U.S. and high-yield bond funds now stand at 486
percent, 205 percent, 87 percent and 78 percent of their 2009
totals.

Flows into emerging market bond funds have been positive
for 21 consecutive weeks and heavily favoured funds with local
currency mandates in the latest week.

(Writing by Kim Coghill; Editing by Neil Fullick)

Emerging market funds suck in almost $6 bln in week-EPFR