Developing world stocks continue impressive run

New York: Emerging-market equity funds continue to recover from market anxiety, according to fund tracker EPFR Global.

Funds dedicated to developing-world stocks posted their second straight week of inflows in the week ending February 24, absorbing $915 million (Dh3.35 billion). At the same time, bond funds extended a winning streak to 16 straight weeks, gaining $493.4 million.

"[Investors] recovered some of the risk appetite that went AWOL earlier in the month," said EPFR in a research note.

Latin America equity funds reversed four consecutive weeks of outflows and garnered $115.4 million. Brazil equity fund inflows hit a five-week high of $113.4 million, while inflows to Mexico equity funds reached an 18-week high of $51.4 million.

Emerging Europe Middle East Asia equity funds also gained an 18-week high, attracting $331.5 million. The subgroup of Emerging Europe equity funds had their best week since mid-October, absorbing $101.1 million.

Global emerging market equity funds advanced $508.8 million.

China funds falter

Africa regional funds also extended their current winning streak to 25 straight weeks. They gained $23.6 million.

However, Asia ex-Japan and China Equity Funds lagged, amid questions over tightening monetary policy in China. Asia regional funds posted outflows of $40 million. China Equity Funds surrendered $132.8 million, the seventh outflow in the past eight weeks. Investors have now removed $1.08 billion from China funds year-to-date.

Meanwhile, emerging market bond funds saw year-to-date inflows move north of $3.5 billion.

"With US [Federal Reserve] chairman Ben Bernanke predicting low US interest rates for some time to come, yield-hungry investors moved into emerging markets and high yield debt," noted EPFR.

The share of money going into emerging markets' local currency bond funds, which had dropped for three straight weeks, rebounded to 58 per cent of the total committed to all emerging-market bond funds.