Inflow data from various providers suggests emerging markets are again in favour as investors allocate money to both debt and equity funds in these regions.
Bank of America Merrill Lynch says the week ending June 26 was the thirteenth week in a row in which its private clients invested net new money into emerging market debt funds.
Meanwhile, backward-looking European data from Cerulli Associates says monthly flows into emerging market equity funds swung to positive for the first time this year in April. If Bank of America Merrill Lynch’s clients are representative of investors in general, the monthly flows for May and June could be significant.
EPFR Global, another fund data provider, corroborated the trend away from European equities, reporting the largest foreign currency denominated redemptions from Europe equity funds in more than six years in the week ending June 25.
Investors may be reasoning that, after a long rally, European equities no longer represent good value, while emerging market assets, which were depressed by macroeconomic turmoil last year, are due for a comeback.
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