Emerging Market Funds, both dedicated and ETFs, have now strung together two consecutive weeks of inflows for the first time in 6 months.
Last week $2.90Bn flowed into Emerging Market funds with Global Emerging Market funds taking in the largest amount. It should be noted that emerging market ETFs were the largest contributor to the strong inflow data telling you that investors were rotating into value.
Part of this is the trend we see in developed markets (-$8.2Bn), and part of this flow is from developed markets. ETF flows are also the least committed and should not be a sign the institutional world is ready to begin making long term allocations to emerging market.
On a emerging market country level, Russia (RSX, quote), South Africa (EZA, quote) and Peru (EPU, quote) were big winners as a percentage of total AUM. While India (EPI, quote) and China (FXI, quote) saw largest aggregate flows in.
YTD, emerging market equities are still down more than $30Bn in outflow, and the total on a 2yr basis is closer to $50bn. When you map the outflows to a graph of the iShares MSCI Emerging Markets Indx (EEM, quote), you can see that the index stopped going down despite the continued outflow into March.
Maybe we have indeed started to turn the boat?