Emerging mkt funds witness $5 bn inflows in one week

Emerging mkt funds witness $5 bn inflows in one week


New Delhi: Emerging market economies including India flourishing under attention from foreign investors have an additional reason to rejoice as equity funds focused on this region witnessed an inflow of $5 billion in the first week of October, according to data compiled by emerging market fund flow tracker EPFR.

Emering market equity funds have absorbed $5.21 billion for the first week of October. Over the past six weeks these funds have taken a net $18.9 billion while posting a collective portfolio gain of 19.69%.

The US, money market and sector fund flow data highlights that there is an increase in risk aversion, a behaviour of consumers and investors under uncertainty, on the back of US housing and mortgaging woes which led to an increasing focus towards the emerging markets.

“This year’s story is clearly the accelerating shift by investors out of funds geared to major developed markets - US, Japan and the Eurozone - and into those focusing on emerging markets," EPFR Global analyst Cameron Brandt said.

Problems in the US subprime market, where lenders give housing loans to people with riskier credit history, had in July led to a crash in the bourses worldwide, including India.

A bulk of the flows into the emerging market was accounted by the Asian economies except Japan and the diversified Global Emerging Markets (GEM) equity funds during the first week of October. The Asian economies excluding Japan accounted for $2.87 billion while GEM mopped up $1.84 billion.