Emerging Markets Dominate 2009 Fund Flows

by: Carl T. Delfeld

According to EPFR Global’s founder and CEO Brad Durham, the year which started with investors fleeing to the perceived safety of Money Market and US Equity Funds including ETFs ended with those two fund groups posting their biggest annual outflows – in dollar terms -- since EPFR Global started tracking them. On the other side of the coin, US, Global and High Yield Bond, Commodity and Technology Sector and Global Emerging Markets (GEM), Asia ex-Japan, Europe and Pacific Equity Funds posted record inflows. So did China, Brazil, Russia and BRICs Equity Funds.

The final week of the year saw US Bond Funds complete 2009 having posted inflows every single week, Global Bond Funds take in over $1 billion for the 16th straight week and y-t-d inflows into GEM Equity Funds push over the $43 billion mark. Money Market Funds, which surrendered over $520 billion during the course of the year, recorded their second best weekly inflow of the year: the $28.8 billion they absorbed was bettered only by the $37 billion they took in during the first week of 2009.

Overall, combing weekly data and the more comprehensive monthly numbers, emerging markets equity funds including ETFs collectively posted inflows of $70 billion while their developed markets counterparts recorded net redemptions of $61 billion while bond funds ended the year having taken in $292 billion.

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