As a further indication of reduced investor confidence in global emerging markets EPFR record net redemptions from equity funds of $11.25bn over the same week.
However, despite the headline figures there were some areas which bucked the trend. Emerging market equity fund flows, for example, proved resilient with two of the four major EPFR Global-tracked emerging market fund groups posting large inflows during the week ending July 7. Global emerging market equity funds took in a total of $517m, Asia ex-Japan Equity Funds gained £124m and EMEA and Latin American funds also recorded modest inflows.
Worse than expected US labour and housing market data and fear of what stress tests of major European banks will reveal continued to weigh on sentiment towards the major developed markets – and the funds investing in them – during the first week of July.
Europe equity funds were the only major EPFR Global-tracked developed markets equity fund group to post inflows during the week, breaking a four-week outflow streak, as investors continued to shift from regional funds to ones investing in individual markets. UK, Germany and France equity funds accounted for the bulk of the $387m which flowed into this fund group.
Meanwhile, the lure of gold and precious metals as a hedge against uncertainty helped commodity sector funds top the list of the EPFR sector funds once again, with investors committing $419m to this fund group which took year-to-date inflows over the $11bn mark. The defensively perceived consumer goods sector funds were the second biggest absorbers of fresh money, pulling in $226m.
