fund flows

A fascinating note has arrived in our inbox from Steven Holden of Copley Fund Research, which tracks the investments of 100 big global EM equity funds with about $285bn of assets under management.

Readers may remember a recent piece based on his monthly report in October, showing that big fund managers were predominantly underweight in China compared with the MSCI Emerging Markets index, and overweight in India. An analysis of data from his November report shows that, on average, managers are in line with the MSCI regarding Russia – but that, individually, they diverge greatly from the index, in ways that suggest contrasting views on the crisis in Ukraine and how to play it as an investor. Read more

Enthusiasm over Narendra Modi’s election in India and fears that Dilma Rousseff may be re-elected in Brazil have prompted a sharp reversal in the two countries’ positions among equity fund managers.

Source: Copley Fund Research

According to a report published on Monday by Copley Fund Research, which tracks the investments of 100 global EM equity funds with $280bn of assets under management, India overtook Brazil in September to become the second biggest EM after China in terms of aggregate country holdings, with $31.6bn in AUM, ahead of Brazil’s $29.6bn. Read more

Unhealthy lifestyles are spreading through emerging market (EM) economies as people adopt fast-food diets, work in stressful and sedentary jobs and contend with worsening pollution. These are unwelcome trends unless, perhaps, you happen to be an investor in EM healthcare stocks.

A proliferation in ailments, rising incomes and growing government support for healthcare in EM countries are bolstering the portfolios of Sectoral Asset Management, a fund company with about $3.5bn under management. In March this year, it publicly launched a fund invested solely in EM healthcare companies. Read more

A report to be released by the Institute of International Finance on Wednesday will make sobering reading for EM investors: estimated portfolio flows to EM assets fell sharply in August to just $9bn, after a monthly average of $38bn between May and July.

August is always a slow month but this year it has been notably sluggish. EM bond issuance, for example, was just $22bn this month from a monthly average of $62bn over the past year and $44bn in August 2013, the IIF said. Read more

It may be early to call the end of the EM rally of the past couple of months but the latest EM portfolio flows tracker from the Institute of International Finances adds to a feeling that it is losing some of its puff.

The IIF says portfolio flows to EMs moderated in April to $25bn, after surging to $38bn in March from $17bn in February. Read more

Is this a turning of the tide? After 22 straight weeks of outflows, dedicated EM equity funds recorded inflows of $2.44bn in the week to April 2, equal to 0.3 per cent of assets under management in the sample followed by EPFR, the Boston-based fund flow watcher.

EM bond funds, too, had inflows in the week, of $1.06bn, or 0.5 per cent of AUM, only the second week of inflows out of the past 17.

So does the past week mark a change in sentiment for EM? Not so fast. Read more

Now that’s what you call a change in sentiment. Outflows from emerging market equity funds so far this year have already eclipsed net sales from all of 2013.

Outflows from EM equity funds in the week to Feb 5 were a whopping $6.4bn, after a $6.3bn outflow in the week before, according to data from EPFR and distributed by Barclays. Read more

As soon as Ben Bernanke mentioned in late may that the Federal Reserve could soon begin to scale back its bond-buying programmed, hell broke loose in emerging markets.

Stock prices declined, currencies fell and interest rates on sovereign or corporate bonds shot up. For many investors, Bernanke’s comments on May 22 in testimony before the US Congress meant that the easy flows of money that had landed in emerging economies would not only end soon, but worse — would be reversed.

As a result, many financial markets in emerging economies began experiencing some “withdrawal symptoms” even before the Fed had acted.

Press forward. By September, the Fed hadn’t touched its bond-buying programme and suggested instead that it wouldn’t any time soon. Most economists and fund managers by then had figured that the famous tapering would not take place until at least December. Read more

Last week’s foray into positive territory didn’t last long. EM dedicated bond funds saw net outflows in the week to Wednesday according to EPFR, the Boston-based fund monitor, making 18 weeks of outflows out of 19 and reversing four weeks of what looked like improving sentiment towards EM issuers.

Flows to EM equity funds went negative, too, after three weeks of inflows. Read more

It’s taken 17 weeks, but emerging market bond funds are back in positive territory at last.

Data provider EPFR, which monitors fund flows, shows that for the week ending 25 September, EM bond funds had an inflow of $570m. Read more

The exodus from emerging markets continued apace with bond and equity funds tracked by EPFR suffering net outflows of $4.4bn in the week to Wednesday.

While the outflows were less than the $5.8bn recorded the week before, it’s hard to put a positive spin on what is essentially another large outflow. Read more

After the worst-ever weekly outflow for emerging market bond funds, with $5.6bn draining away, fund managers have rightly been worried about what the latest figures would show.

As it happens, investors have regained some of their nerve: in the week to July 3, EM bond funds suffered a much smaller $960m of outflows, according to bankers citing data from EPFR, the research company. Read more

What’s that whooshing sound? Something like five-and-a-half billion dollars draining out of emerging market bond funds, that’s what.

According to data from EPFR Global, the fund flow data provider, EM bonds just had their worst week on record. This chart says it all: Read more

The US Federal Reserve signalled the coming end of QE only a month ago, but forecasters are already producing long-term forecasts of the possible impact on emerging markets of the expected cut in easy money.

That’s brave, given the amount of noise in the market. On Wednesday, the Institute of International Finance, the banker’s club, pitched in with a report predicting a drop in net private capital flows to EMs over the next 18 months to the lowest level since 2009. That sounds bad, given that 2009 was a grim year. But the IIF’s numbers are a bit less gloomy than its top line. Read more

Investors seem to be taking a breather in the emerging markets sell-off. On Friday, Asian currencies were mostly stable against the dollar and equities were only marginally down, with the MSCI Asia-Pacific ex-Japan index down 0.7 per cent.

But the mood was anything but calm: there are widespread concerns that the aftershocks of the US Federal Reserve’s move on ending QE may have further to go. A lot of information has still to come out into the open – not least which investors are staring at overwhelming losses. Read more