Bloomberg News

Emerging Stock Inflows Hit 8-Week Low on Higher Oil, EPFR Says

February 24, 2012

Inflows into emerging-market equity funds fell to the lowest level in eight weeks, according to EPFR Global, amid speculation higher oil prices may temper stock gains.

Investors added $348 million to funds that invest in emerging-market stocks in the week ended Feb. 22, trailing the $2.2 billion injected in the prior week, Cameron Brandt, director of research at EPFR, wrote in an e-mail. Global equity funds saw outflows of $5.9 billion in the five days to Feb. 22 as money flowed out of U.S. stock funds, a report by the Cambridge, Massachusetts-based data research company showed.

Investors have added $20.7 billion to emerging-market equity funds in 2012, compared with outflows of $11.79 billion in the same period of last year, Brandt said. The MSCI Emerging Markets Index (MXEF) reached the highest level since Aug. 4 on Feb. 20, as a second Greek bailout and positive U.S. economic data buoyed sentiment. Oil climbed to a nine-month high amid escalating Iran tensions.

“Investors took profits and digested the implications of higher oil prices on the U.S. recovery and Europe’s chances of avoiding another recession,” EPFR said in the report.

The MSCI Emerging Markets measure has gained 17 percent this year, on track for its best quarter since the three months to Sept. 30, 2010. The index trades for 12.2 times reported company earnings, the most expensive level since June.

Emerging-markets bond funds took in $701 million, beating last week’s $673 million increase. Investors pulled money from Chinese stock funds, snapping a six-week rally that saw inflows hit $1.8 billion this year through Feb. 15.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net


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