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Friday, June 05, 2009

Equity funds see highest weekly inflow in a year

Global investors have poured in close to USD 200 million in India-focused equity funds in the first week of June, while the overall Asia-dedicated funds witnessed the biggest inflows of as much as USD 1.54 billion, a report says.

According to data complied by international fund tracking firm EPFR Global, India equity funds saw an inflow of USD 199 million in the first week of June, which is the highest amount seen in the past 55 weeks.

In Asia (excluding Japan), equity funds posted the biggest inflows in dollar terms worth USD 1.54 billion.

"With currency rather than growth issues on their minds, investors gravitated towards markets with a reputation for fiscal discipline (Asia) or big commodity stories (Latin America, Russia ) in late May and early June," the report said.

For the second week running, China's previously dominant role in Asia (ex-Japan) equity fund flows was muted.

Besides, all emerging markets equity funds combined have now taken in USD 26.1 billion of net inflows year to date, a little more than half of the USD 50 billion in assets lost to net outflows from these funds in 2008.

Despite a solid performance by the US equity funds during the week ending June 3, the declining dollar prompted investors to rotate money out of this fund group with large cap Exchange Traded Funds (ETF) accounting for the bulk of the modest outflows.

Sector wise, EPFR Global-tracked commodity and energy sector funds saw a good week due to dollar weakness, Chinese demand and OPEC's apparent unity when it comes to reining in oil production.

The commodity sector fund took in USD 798 million, while energy sector saw an inflow of USD 281 million.

The flows into commodity sector funds were the largest since the fourth week of February 2008 and took year-to-date inflows of over the USD six billion mark, the report added.

Another round of largely successful capital raising by major banks helped financial sector funds post inflows of USD 481 million, while consumer goods and utilities sector funds both absorbed over USD 100 million for the week.

source: Financial Express

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