Bloomberg News

Investors Dump Emerging-Market Stocks To Cut Risk

April 13, 2012

Investors pulled the most money this year from emerging-market stock funds in the week ended April 11, amid renewed fears Europe’s sovereign debt crisis may curb growth and as slowing job gains boosted worries of a U.S. slowdown, according to EPFR Global.

Emerging-market equity funds lost $859 million and bond funds specializing in developing markets surrendered $99 million, Cameron Brandt, EPFR’s director of research, wrote in an e-mail. The stock fund outflows were the largest since the third week of December, he said. Equity funds saw net outflows of $9.26 billion, the highest this year, according to an e- mailed statement from data provider EPFR.

Yields on Spanish and Italian debt jumped amid concern the countries may struggle to repay their debt. The U.S. added 120,000 jobs in March, the fewest in five months. Emerging- market stocks fell for five days through April 10, losing 3.7 percent.

“People are just generally more nervous, given what they’ve been through in recent years,” Brandt said by phone. The outflows are “indicative of a change in sentiment, but not a panic.”

Net investment into emerging-country stock funds has totaled $24.78 billion this year, compared with outflows of $15.97 billion in the same period of 2011. Developing-nation bond funds recorded inflows of $14.87 billion this year.

Russia-focused equity funds saw redemptions for the first week since January, and investors pulled cash from Brazilian stock funds for a fourth week. Vietnamese equity funds saw their 15th straight week of inflows.

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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