The September quarter was a terrible one for risk assets. As the chart shows, funds moved out dramatically from equities—both from developed and emerging markets.
The MSCI World index fell by 17.1% during the quarter, while the MSCI Emerging Markets index fell much more, by 23.2%.
Since the main risk was centred in Europe the MSCI EMU index was down a huge 28.7% in the September quarter.
Bond funds, too, were not spared and inflows into them were much lower. Also, as EPFR Global points out, for emerging market bonds, “the last week of September saw a record setting outflow of $3.19 billion as rising risk aversion hit home”.
On the other hand, the final week of September saw US bond funds chalk up their biggest weekly inflow on record.
Graphic by Sandeep Bhatnagar/Mint
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