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  • Feb 20th, 2005
  • Comments Off on Investors move cash from US to international funds
Investors continued to shift money away from US stock funds and into international and emerging market funds in the week through February 16, according to fund flow research firm Emerging Portfolio Fund Research (EPFR). Emerging market equity funds tracked by EPFR received another $1.26 billion of inflows in the latest week, just below the previous week's record of $1.33 billion. All other fund groups tracked by EPFR received net inflows for the week except US equity funds, which sustained $475.5 million of outflows.

"Global investors continued to shift their allocations away from US equity funds and into global, international and emerging market funds," said EPFR on Friday.

Cambridge, Massachusetts-based EPFR tracks about 8,000 international and emerging market stock and bond funds with more than $3 trillion in assets, covering up to 90 percent of emerging market stock funds and two-thirds of US funds.

The latest $1.26 billion of inflows into emerging market stock funds was the second largest weekly amount since EPFR began tracking fund flows on a weekly basis in 2000.

Year to date, these funds have taken in $3.08 billion. The latest inflows were evenly spread between the four fund groups that comprise EPFR's dedicated emerging market equity funds.

Global emerging market equity funds took in $365.8 million, Asia ex-Japan stock funds received $401 million, and Europe, Middle East and Africa equity funds took in $351.9 million.

LATIN AMERICA BOOST: Latin America stock funds received $141.9 million, the most in a week since March 2002. India funds took in $92.8 million. Investors placed $39.5 million in Taiwan stock funds and $36.7 million in China/Greater China equity funds.

Among all equity funds tracked by EPFR with assets of $1.36 trillion, investors contributed $1.87 billion in the week.

Global/international stock funds took in $817.9 million, bringing their year to date inflows to $2.60 billion.

Japan equity funds had inflows of $129.8 million for the week, and Europe stock funds received $122.4 million.

US equity funds tracked by EPFR were the only fund group to suffer outflows during the week, losing $475.5 million. EPFR said investors have pulled $2.06 billion from these funds year to date.

Other recent surveys also pointed to this trend of US stock fund outflows.

On Thursday, fund research firm Lipper Inc, a unit of Reuters Group Plc, said US stock mutual funds experienced outflows of $2.8 billion in January.

These outflows in January run contrary to recent years, when between $15 billion and $40 billion of inflows into US stock mutual funds were reported for the month, Lipper said.

On Friday, Banc of America Securities analyst Tom McManus said in a research note that US mutual fund net sales data so far in 2005 showed a lack of enthusiasm for domestic stock funds.

McManus said US domestic stock funds have taken in about $11 billion since the start of the year, significantly lower than in eight of the past nine years.

Copyright Reuters, 2005


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