Sorry!! The article you are trying to read is not available now.

Investors Rush to Exit Emerging Markets

Print comment Post Comments
Not so long ago, investors looking for big returns from emerging markets weren’t seen as crazy, risk-taking adventurers. After all, since the financial collapse, established markets like the US and EU weren’t exactly safe bets.

But as civil unrest and violence continues to rock the Middle East and raise questions about further contagion, investors in emerging markets are spooked. The AP reports:

According to fund tracker EPFR Global, fund managers and other investors yanked $5.45 billion from emerging markets funds in China, India, Brazil and elsewhere in the second week of February and placed it in equity funds of advanced economies -- their biggest weekly inflow in more than 30 months.

Developed market funds recorded their seventh straight week of inflows in mid-February -- with European equity fund flows hitting 41-week highs. So far this year, investors have committed $47 billion to U.S., European, Japanese and global equity funds -- $29 billion of it into the U.S alone.

Meanwhile, hedge funds are also ditching emerging markets and pouring their money into oil futures. Financial News reports:

“When managers left emerging markets, they crowded into crude oil, with net long positions reaching a notional $21.5bn, up from $14.2bn in November.”

The one-month rolling emerging market exposure for global macro funds fell as managers began to exit the sector. Billion dollar emerging markets hedge funds, including Brevan Howard Asset Management and BlueCrest Capital Management, have made losses in 2011. In the year to date, Brevan’s Emerging Market Strategies Fund fell 2.7% to Feb 11 and BlueCrest’s fund fell 1.1% in January.”

For more on the fad that was emerging markets, check out Minyanville’s Pop Biz report.

POSITION:  No positions in stocks mentioned.