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Flows Into Emerging Market Equity Funds Hit 33-month High

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Investors stuffed $6 billion into Emerging Markets Equity Funds during the week ended October 6, according to EPFR Global.

The Cambridge, Massachusetts-based research firm said that these funds had their best week since late 2007, and their second best week on record.

The commodity-producing countries and regions attracted the strongest interest, say EPFR analysts, as investors sought protection from the latest bout of dollar weakness.

Among the sub-fund groups, Africa Regional Funds had their second-best week on record; flows into South Africa Equity Funds climbed to their highest level since early 4Q07; and the $129 million absorbed by Russia Equity Funds during the week ending October 6 was the most in over five months.

Interest in Latin America re-centered on Brazil with a vengeance in early October as flows into Brazil Equity Funds climbed to a 156-week high.

Additionally, Emerging Markets Bond Funds took in over $1 billion for the third consecutive week. Year-to-date flows into Commodity Sector Funds moved within striking distance of the $19 billion mark.

Emerging markets have gone vertical, with the iShares MSCI Emerging Markets Index Fund (EEM) up 10% in just the past four weeks. And why not? It’s where all the growth is: the IMF forecasts growth in 2011 of 2.2% in the US; 6.4% for the emerging markets.

We explored the melt up in emerging markets in greater detail earlier this week.
POSITION:  No positions in stocks mentioned.