Investors continued to pull money out of emerging-market bond and equity funds on escalated concerns about the tapering of the U.S. Federal Reserve's bond-buying program.
During the week ended June 12, mutual and ETF fund managers pulled out $8.9 billion in total, according to data provider EPFR Global.
This adds to the nearly $6 billion in outflows last week, bringing the total selling of emerging- market assets to nearly $15 billion.
The outflows out of emerging-market bond funds were the second-highest in the record book with $2.53 billion in net unwinding.
These assets have seen a sharp fall in value after weeks of continued selloff in emerging-market currencies and bonds. Investors continued to sell dollar-denominated debt issued by emerging market countries and companies to the tune of $ 1.2 billion in the latest week.
Local-currency debt, a dominant investment strategy for the year, also saw $930 million in outflows after these currencies weakened sharply to the dollar. So far this year, emerging-market assets continue to be the worst performing asset class.
The widely followed sovereign debt benchmark index, J.P. Morgan Emerging Market Bond Index Global, has lost 6.1% so far this year, according to the index provider. Meanwhile, stocks have taken an even more severe beating in emerging countries.
The MSCI EM stock market index is down 9.6% on the year. Fund flows out of emerging-market equity funds totaled $6.37 billion in the latest week, following outflows of $5.5 billion in the previous week. But there may be some signs of hope for this beleaguered asset class.
The modest stabilization in emerging-market assets over the past couple of sessions may draw long-term investors such as sovereign wealth funds and banks to invest in this asset class, especially at the current weaker valuations, said Koon Chow, strategist at Barclays.
Bank of America analysts say they would give a "contrarian buy signal" if flows out of emerging-market equities next week are in the $8 billion to $10 billion range.
nasdaq.com
During the week ended June 12, mutual and ETF fund managers pulled out $8.9 billion in total, according to data provider EPFR Global.
This adds to the nearly $6 billion in outflows last week, bringing the total selling of emerging- market assets to nearly $15 billion.
The outflows out of emerging-market bond funds were the second-highest in the record book with $2.53 billion in net unwinding.
These assets have seen a sharp fall in value after weeks of continued selloff in emerging-market currencies and bonds. Investors continued to sell dollar-denominated debt issued by emerging market countries and companies to the tune of $ 1.2 billion in the latest week.
Local-currency debt, a dominant investment strategy for the year, also saw $930 million in outflows after these currencies weakened sharply to the dollar. So far this year, emerging-market assets continue to be the worst performing asset class.
The widely followed sovereign debt benchmark index, J.P. Morgan Emerging Market Bond Index Global, has lost 6.1% so far this year, according to the index provider. Meanwhile, stocks have taken an even more severe beating in emerging countries.
The MSCI EM stock market index is down 9.6% on the year. Fund flows out of emerging-market equity funds totaled $6.37 billion in the latest week, following outflows of $5.5 billion in the previous week. But there may be some signs of hope for this beleaguered asset class.
The modest stabilization in emerging-market assets over the past couple of sessions may draw long-term investors such as sovereign wealth funds and banks to invest in this asset class, especially at the current weaker valuations, said Koon Chow, strategist at Barclays.
Bank of America analysts say they would give a "contrarian buy signal" if flows out of emerging-market equities next week are in the $8 billion to $10 billion range.
nasdaq.com
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