Investors flee equities for bonds on US economy fears-EPFR

* Global equity funds see outflows of $7 bln

* Bonds still popular but pace of inflows slowing

* Emerging market bonds have 13th week of inflows

TAIPEI, Aug 27 (BestGrowthStock) – Investors moved decisively into
bond funds and slashed their equity portfolios on mounting
fears slowing U.S. economic activity will have a knock-on
effect on the rest of the world, EPFR Global data showed on

Equity funds tracked by the fund research firm saw an
aggregate $7.1 billion redeemed in the week to August 25, while
bond funds of all kinds absorbed a total $5.2 billion and money
market funds had inflows for the fourth week in the last five.

U.S. economic data have been a steady flow of disappointing
pointers, with new home sales tumbling to a record low and the
labour force shrank for two straight months in July.

Investors have been betting monetary policy will remain
loose for a very long time in many parts of the world, buying
up corporate, municipal and government bonds.

In the latest week, they have also become more cautious
about emerging markets equities, an asset class that has been a
standout for the past year.


Global emerging market equity funds had net inflows of $322
million, the lowest total since a streak of inflows began 13
weeks ago.

Asia-Pacific equity funds were relatively hard hit, posting
outflows of $289 million for the week, based on fears a U.S.
slowdown would hurt the region’s exporters.

Both Latin American and Europe, Middle East & Africa fund
groups absorbed less than $40 million each.

In terms of frontier markets, Africa funds maintained their
sleeper hit status. They took in new money for the 50th time in
51 weeks as year-to-date inflows surpassed the $550 million
mark, three times their record full year total in 2007.


U.S. equity funds had the biggest outflows among developed
markets in dollar terms. They had net outflows of $5.4 billion
in the latest week, though that was smaller than the prior
week’s redemptions and small cap U.S. equity funds had net
inflows for only the third time in the last 15 weeks.

Europe equity funds had fresh outflows, bringing
year-to-date redemptions to $15.7 billion, and Japan equity
funds had a ninth consecutive week of outflows.


Inflows to energy sector funds dominated the sector-focused
funds. The energy sector had $442 million in new money in the
latest week, despite fears of slowing crude demand resulting
from softer global growth prospects.

Other sectors had varying degrees of redemptions.

Investors pulled $435 million out of consumer goods sector
funds, ended a five-week string of inflows into real estate
sector funds and knocked technology sector funds deeper into
negative territory for the year.


Emerging market bond funds are still the rising star of
this fund group. They have had inflows for 13 weeks in a row
and year-to-date inflows are now more than 300 percent of the
previous full-year record set in 2005.

U.S. bond funds had $2.5 billion in inflows for the week,
bringing year-to-date inflows above $66 billion.

Inflows into global bond funds have been robust this year
as well, but have lost momentum since early May as downgrades
of smaller developed European markets have taken their toll.

During the first four months of this year weekly inflows
into the fund group averaged $1.82 billion. Since early May
that average has fallen to $826 million.
(Reporting by Kevin Plumberg; Editing by Mathew Veedon)

Investors flee equities for bonds on US economy fears-EPFR