Investor Flight From Emerging Markets Accelerates

Despite the focus on problems happening in Europe, global uncertainty is slamming investor sentiment for emerging markets, according to data sent to us by Haver Analytics.EPFR/Haver: The first full week of February proved a painful one for emerging markets equity funds in general and the diversified Global Emerging Markets (GEM) Equity Funds in particular as investors pulled another $2.9 billion out of these funds, with $1.76 billion — a 60 week high — coming from the GEM Funds. Concerns about the possible spillover effects of Greece s fiscal crisis also hit High Yield Bond Funds: those tracked by EPFR Global posted their biggest weekly outflow since early 3Q08.

Bonds are still hot, as they were in 2009. Interestingly investors started moving back into Japan stocks as well:

Investors did keep faith with Global and US Bond Funds, extending their current inflow streaks to 43 and 58 straight weeks respectively, and committed nearly $700 million to Emerging Markets Bond Funds. They also committed fresh money to Japan Equity Funds.

With yields at record lows, cash continued to flow out of Money Market Funds despite the uncertain investment landscape. Redemptions during the week ending Feb. 10 totaled $9.62 billion, taking year-to-date outflows close to the $80 billion mark.
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