Citi’s Elaine Chu and Markus Rosgen highlight that fund flows into emerging market funds continue to slow.
Citi: [International fund] Inflows entered the 17th week since mid-July, but the amount has been decreasing for three weeks in a row, from $1.3b in the 2nd-to-last week of October to US$643m last week.
Flows into Asia Ex-Japan have relatively weaker than those for other emerging markets. Latin America remains a star.
Citi: Comparing to $1.5b received by GEM funds, Asian fund inflows were not even half of that, at US$627m only. In terms of flows relative to asset size, they are behind those to Latin America equity funds, but similar to the magnitude of EMEA fund inflows.
Nevertheless, Ms. Chu highlights that China remains a star as well despite the overall relative weakness for Asia. China accounted for 60% of Asian inflows last week.
Given the outflow of funds for U.S. equities year to date based on both mutual fund data from the Investment Company Institute, as well as aggregate ETF data, and given the massive flows into corporate bonds, perhaps investors could reconsider U.S. equities on a relative value basis.
(Via Citi Investment Research, “Fun With Flows”, Elaine Chu, 16 November 2009)