Investors Staged A Massive Move Into Emerging Markets This Week

Funds dedicated to investing in emerging-market (EM) stocks and bonds recorded their biggest combined inflows in over a year in the week through Wednesday, April 9, according to new data from EPFR, a firm that tracks global fund flows.

EM equity funds expanded assets under management by $US2.9 billion, marking the largest weekly inflow since February 2013, while EM debt funds took in $US1.8 billion, the most since January 2013.

This week marked the second week of inflows into emerging markets following 22 straight weeks of outflows.

Michael Hartnett, chief investment strategist at BofA Merrill Lynch, describes it as “capitulation back into EM.”

Russia-dedicated equity funds saw inflows this week totaling 1.9% of assets under management, while funds investing in Indian equities recorded inflows amounting to 0.3% of assets. Brazil equity funds, on the other hand, saw outflows on the order of 2.9% of assets under management, and China equity funds recorded outflows amounting to 0.2% of assets.

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