Emerging Markets Equity Funds Post Strong Q1 Fund Flows Results

Apr. 01, 2019 3:33 PM ETIEMG, EEM, VEMAX, VEIEX, PRMSX, PRZIX1 Like
Pat Keon, CFA profile picture
Pat Keon, CFA
195 Followers

Summary

  • Emerging markets equity funds have taken in $18.0 billion in net new money for the year to date.
  • The group has had twelve straight weekly net inflows.
  • The iShares Core MSCI Emerging Markets ETF has had net inflows of $5.0 billion.

Emerging markets equity funds have recorded their third best quarterly net inflows ever (+18.0 billion) for the quarter to date. The group has done this on the strength of its current streak of 12 straight weekly net inflows, during which time emerging markets equity funds posted their fourth largest weekly net positive flow (+$3.4 billion for the fund-flows week ended February 6) in the group's history. Lipper tracks fund-flows data going back to 1992.

Similar to other asset classes, emerging market equity funds took strength from the Federal Reserve easing off its interest-rate hike program and its hawkish stance at the start of the year. In general, lower (or static) U.S. interest rates are accompanied by a weaker U.S. dollar and lower U.S. Treasury yields — these two factors are a boon to emerging markets equities. This, coupled along with rumblings that the U.S and China were close to ending their trade war, made emerging markets equities an attractive investment.

The net inflows for emerging markets funds in Q1 were more heavily weighted to ETFs (+$13.1 billion) than mutual funds (+$4.9 billion). On the ETF side of the ledger, the largest individual net inflows belonged to the iShares Core MSCI Emerging Markets ETF (IEMG, +$5.0 billion) and the iShares MSCI Emerging Markets ETF (EEM, +$2.5 billion). For mutual funds, the best net positive flows belonged to the Vanguard Emerging Markets Stock Index Fund (VEMAX, VEIEX, +$2.3 billion) and the T. Rowe Price Emerging Markets Stock Fund (PRMSX, PRZIX, +$747 million).

Emerging Markets Equity Funds (including both mutual funds and ETFs), Quarterly Net Flows ($Bil), Q1 2018-Q1 2019 (to date)

Source: Lipper

This article was written by

Pat Keon, CFA profile picture
195 Followers
Pat Keon is a senior research analyst at Lipper specializing in U.S fund classifications and portfolio analytics. Pat joined the firm in 2005 and has worked in the research and portfolio groups during his tenure. Pat has earned an MBA from Regis University (Denver, CO) and a Bachelor's from Iona College (New Rochelle, NY).
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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