GLOBAL - Investors have pulled money from emerging market bond funds for first time since January as many look to capitalise on recent peaks.
EmergingPortfolio.com Fund Research (EPFR) tracked 173 dedicated emerging market bond funds with US$12bn in assets for the week ending May 21, 2003. Net investor redemptions during the week hit US$1.8m.
EM bond funds have now attracted inflows of US$1.94bn year to date, still more than three times total inflows for all of 2002.
Brad Durham, managing director of fund research, said that it was too early to say whether this meant that the EM bond market might be overheating.
“It is really difficult to hang your hat on one week of flows for spotting a new trend, but it could be indicative that the sector is cooling off,” he said.
“You would probably need another week or so of figures to really support that.”
International bond funds received healthy inflows. Net inflows reached US$201.3m for the week, resuming the year’s inflow trend after the previous week’s US$41.5m outflow. The 212 international bond funds tracked, with US$46.9bn in assets, have attracted US$1.85m in positive flows so far this year.
All other international and emerging market fund categories, except EMEA equity funds, leaked assets due to outflows.
Emerging Europe/Middle East/Africa regional equity funds posted positive results for the fifth consecutive week. Investors contributed a net US$38m for total inflows of US$127.4m this year.
Global emerging market equity funds, on the other hand, suffered US$45m in outflows during the week, adding to the total net outflows of US$334m from these funds year to date. EPFR tracks 181 GEM equity funds with US$34.6bn in assets.
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