EM funds set $7.4bn record inflows

Inflows to dedicated emerging market equity funds reached a record of $7.4bn in the second week of January, according to a report published by Morgan Stanley.

The previous record of $6.1bn inflows was set in 2007.

Morgan Stanley reported 18 consecutive weeks of inflows versus the record of 29 weeks set between June 2, 2010 and December 15, 2010.

“Very large inflow weeks tend to coincide with subsequent market corrections. However, on this occasion, with easy global monetary policy, an improving EM growth outlook, and the prospect for earnings growth rate to pick up, we would not expect a significant setback,” the bank said.

Global emerging market funds also reported record-high inflows of $5.69bn for the current week. Dedicated EM funds have reported cumulative inflows of $45bn since September.

ETF-type funds accounted for 63% of the total inflows for the current week.
Assets under management by emerging market funds reached at an all-time high of $781bn.

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