Emerging markets and high-yield remain strong-EPFR ;D
By Sam Forgione
NEW YORK | Fri Feb 10, 2012 4:58pm EST
NEW YORK Feb 10 (Reuters) - Investors poured nearly $17 billion into funds targeting emerging market securities and high-yield bonds in the latest week on optimism that Greece's leaders would agree to new bailout terms, data from EPFR Global showed on Friday.
Emerging market equity funds absorbed $5.8 billion, a 68-week high, while emerging market bond funds absorbed an unprecedented $2.14 billion, according to the Cambridge, Massachusetts-based fund tracker.
Emerging markets funds are "a key proxy for risk right now," said David Lutz, managing director at Stifel Nicolaus.
Global emerging markets equity funds (GEMs) gained $5.4 billion in inflows for the week ended on Wednesday, another record, according to EPFR.
Latin American equity funds had inflows of $50 million, while Mexico equity funds had outflows of $160 million.
Globally tracked high-yield bond funds pulled in $3.55 billion, an increase of $810 million from last week as the Fed's announcement of low interest rates on Treasuries continued to push interest in higher-income investments.
"Corporate borrowing rates have hit record lows, default rates are dropping significantly, so there's more and more confidence in high-yield issuance right now," said Lutz.
Lutz added that the prices on both bonds and equities have risen "in tandem" so far in 2012, a rare event.
U.S. bond funds overall gained $3 billion in inflows for the period, while municipal bond funds gained $1.1 billion, down from the previous week's $1.67 billion but still strong.
Municipal bonds are currently experiencing low supply, which combined with their tax-free advantage to drive gains over the period, said Alan Schankel, director of fixed income research at Janney Montgomery Scott.
Strong data on U.S. unemployment and job creation released on Feb. 3 rallied stocks and improved market sentiment. The S&P 500 rose 1.95 percent over the reporting period on account of the rally. Indexes were otherwise tame in response to Greece's delay in accepting new bailout terms.
EPFR reports that U.S. equity funds attracted $2.7 billion over the reporting period, making up for the $2.67 billion in redemptions the previous week.
Commodities funds had the most inflows on a sector-specific basis with $941 million in inflows, with gold and precious metals funds accounting for $495 million in inflows.
"The U.S. recovery, the easing bias of many major central banks and the acquisitions drive by Chinese, Brazilian and Indian companies are underpinning the latest surge in flows," said EPFR Global's director of research, Cameron Brandt.
EUROPE AND BRIC FUNDS
European money market funds gained $8.32 billion, accounting for three-quarters of the $11.2 billion into global money market funds, according to EPFR.
Developed European equity funds gained $734 million, a nearly 6-month high according to EPFR, as some investors remained optimistic that Greece would agree to rigid reform policies in return for a bailout package.
European bond funds underperformed equities with $66 million in inflows, while EMEA (emerging Europe, Middle East, Africa) equity funds absorbed $245 million in inflows.
Dedicated BRIC funds gained $253 million in inflows, while equity-specific funds in China and Russia had inflows of $341 million and $108 million, respectively.
Meanwhile, Brazil had outflows of $18 million, while India had modest inflows of $37 million.
By Sam Forgione
NEW YORK | Fri Feb 10, 2012 4:58pm EST
NEW YORK Feb 10 (Reuters) - Investors poured nearly $17 billion into funds targeting emerging market securities and high-yield bonds in the latest week on optimism that Greece's leaders would agree to new bailout terms, data from EPFR Global showed on Friday.
Emerging market equity funds absorbed $5.8 billion, a 68-week high, while emerging market bond funds absorbed an unprecedented $2.14 billion, according to the Cambridge, Massachusetts-based fund tracker.
Emerging markets funds are "a key proxy for risk right now," said David Lutz, managing director at Stifel Nicolaus.
Global emerging markets equity funds (GEMs) gained $5.4 billion in inflows for the week ended on Wednesday, another record, according to EPFR.
Latin American equity funds had inflows of $50 million, while Mexico equity funds had outflows of $160 million.
Globally tracked high-yield bond funds pulled in $3.55 billion, an increase of $810 million from last week as the Fed's announcement of low interest rates on Treasuries continued to push interest in higher-income investments.
"Corporate borrowing rates have hit record lows, default rates are dropping significantly, so there's more and more confidence in high-yield issuance right now," said Lutz.
Lutz added that the prices on both bonds and equities have risen "in tandem" so far in 2012, a rare event.
U.S. bond funds overall gained $3 billion in inflows for the period, while municipal bond funds gained $1.1 billion, down from the previous week's $1.67 billion but still strong.
Municipal bonds are currently experiencing low supply, which combined with their tax-free advantage to drive gains over the period, said Alan Schankel, director of fixed income research at Janney Montgomery Scott.
Strong data on U.S. unemployment and job creation released on Feb. 3 rallied stocks and improved market sentiment. The S&P 500 rose 1.95 percent over the reporting period on account of the rally. Indexes were otherwise tame in response to Greece's delay in accepting new bailout terms.
EPFR reports that U.S. equity funds attracted $2.7 billion over the reporting period, making up for the $2.67 billion in redemptions the previous week.
Commodities funds had the most inflows on a sector-specific basis with $941 million in inflows, with gold and precious metals funds accounting for $495 million in inflows.
"The U.S. recovery, the easing bias of many major central banks and the acquisitions drive by Chinese, Brazilian and Indian companies are underpinning the latest surge in flows," said EPFR Global's director of research, Cameron Brandt.
EUROPE AND BRIC FUNDS
European money market funds gained $8.32 billion, accounting for three-quarters of the $11.2 billion into global money market funds, according to EPFR.
Developed European equity funds gained $734 million, a nearly 6-month high according to EPFR, as some investors remained optimistic that Greece would agree to rigid reform policies in return for a bailout package.
European bond funds underperformed equities with $66 million in inflows, while EMEA (emerging Europe, Middle East, Africa) equity funds absorbed $245 million in inflows.
Dedicated BRIC funds gained $253 million in inflows, while equity-specific funds in China and Russia had inflows of $341 million and $108 million, respectively.
Meanwhile, Brazil had outflows of $18 million, while India had modest inflows of $37 million.