Investors rush to regain emerging market exposure-EPFR

* Emerging market stock fund inflows more than $3 bln in
week

* Developing bond market inflows at record so far this year

* U.S. bond fund weekly inflows highest since February

* Demand for emerging markets likely valuation driven

HONG KONG, July 20 (BestGrowthStock) – Emerging markets were in
high demand in mid July, with bond fund inflows at a record, as
investors chose dynamic developing economies over lagging
advanced markets, EPFR Global said on Tuesday.

Emerging market equity funds tracked by EPFR posted
combined inflows of more than $3 billion for the week ended
July 14, while emerging market bond funds took in $745 million,
bringing their year-to-date inflows to an all-time high of
$18.5 billion.

While fears about the euro zone sovereign debt crisis have
abated somewhat in the run up to the release of bank stress
test results on Friday, a flurry of weak U.S. economic data and
the impact of China’s measures to cool its economy have sapped
willingness to take risks for higher returns.

However, quarterly earnings reports have been positive
enough for investors to dive back into emerging markets stocks
and bonds across the world.

EMERGING MARKET EQUITIES:

Desire to own the fund group was indiscriminate. Global
emerging market equity funds absorbed the highest inflows since
the third week of October.

Asia ex-Japan, Latin America and Europe, Middle East &
Africa fund groups all posted inflows.

India equity funds alone took in $114 million, a 13-week
high.

DEVELOPED MARKET EQUITIES:

Flows into developed market stock funds were not heavy.

The majority of the $1.86 billion that poured into U.S.
equity funds went to a handful of large-cap blend ETFs, masking
the outflow from other sub-fund groups.

Japan-focused funds suffered $171 million in outflows.

Europe-funds also had outflows despite interest in UK,
German and France equity funds.

SECTOR FUNDS:

Commodity sector funds were the biggest recipients of
inflows, and energy sector funds were the only other fund group
to take in over $250 million during the week. Interest in
exposure to gold has been a boon to the commodity sector.

By contrast, consumer goods sector funds saw the biggest
outflows.

FIXED INCOME FUNDS:

Flows into emerging market bond funds on a year-to-date
basis have sought local currency fixed income more than hard
currency. Domestic currency bond funds have had inflows of $9.9
billion compared with $4 billion of inflows to hard currency
paper.

In the week to July 14, U.S. bond funds took in $2.97
billion, the biggest weekly gain since February 24.

Stock Market Investing

(Reporting by Kevin Plumberg; Editing by Kim Coghill)

Investors rush to regain emerging market exposure-EPFR