GLOBAL - Despite emerging market bond funds suffering their worst week of outflows this year, Asia ex-Japan equity funds have picked up US$1.3bn in inflows in the last ten weeks, according to a report from EmergingPortfolio.com.
EmergingPortfolio.com, which tracks more than 5000 funds with US$1.2trn in assets, found Asia to be the main beneficiary of investor inflows among developed and emerging market fund categories.
“Asia equity funds continue to be flooded with fresh money from investors,” said EmergingPortfolio.com managing director, Brad Durham.
“The ten consecutive weeks of inflows that the Asia ex-Japan funds is translating into regional outperformance.”
These funds include 277 vehicles with US$15.5bn in assets and show cumulative inflows for the year to date of US$765.3m.
Among the regional indices, the MSCI EMF Far East Index was the best performer in July, up 9.1%.
Japan equity funds saw inflows of US$115m in the last week and for the year to date, the balance of flows is now positive by US$474m which represents 5.4% of total assets.
Emerging bond funds lost money faster than developed market bonds funds, shedding US$64.2m and US$56.3m respectively in assets last week.
In addition, the Morgan Stanley Asset Allocation Committee has raised its asset allocation to emerging markets from 5% to 7% on its ETFs, verses a benchmark of 4%.
Emerging markets equities have been solid performers this year, up 16% in local currency terms and 21% in US dollars.
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