beyondbrics

Investors are rushing back into emerging markets, according to figures released today. EPFR reports that in the week to July 14, emerging market equity funds attracted more than £3bn, and EM bonds funds $745m, taking the bond inflow for 2010 to a record $18.5bn.

These are big numbers. In the same week, inflows into the world’s biggest markets – the US’s – were $1.86bn into equity funds and $2.97bn into bond funds. Flows into Indian and Brazilian equity funds were particularly strong.

Fears about a double-dip recession are receding amid solid gains in US corporate earnings. Emerging market equities as measured by the MSCI EM index have gained 4.1 per cent this month. But at 947.86 the index is well short of its April high for 2010 of 1046.44, or even its June peak of 978.59. So this remains a fairly modest rally so far.