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Emerging-Market Funds Outflow Surpass Total 2013 Sales

Emerging-Market Funds Outflow Surpass Total 2013 Sales (Bloomberg)

Less than two months into 2014, global investors pulled more money out of emerging-market stock and bond funds than the total amount they withdrew last year. Investors yanked out $4.5 billion from funds in the week through Feb. 12, extending the total outflow this year to $29.7 billion, according to Barclays Plc, which cited data provider EPFR Global. In 2013, $29.2 billion left funds invested in emerging-market assets. Capital outflows are showing no signs of abating, even as stocks and currencies from developing nations rose this month after the biggest equity losses in January since 2009. BlackRock Inc.’s (BLK) Larry Fink called emerging-market assets cheap, but concerns remain about slowing growth in China, trade deficits in Turkey and the Federal Reserve’s reduction of stimulus. Another factor working against emerging markets is that those investments typically do pay dividends. Those exceptions that pay dividends tend to do so in meager amounts compared to stocks from developed markets.

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Less than two months into 2014, global investors pulled more money out of emerging-market stock and bond funds than the total amount they withdrew last year.

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Emerging-Market Funds Outflow Surpass Total 2013 Sales

Less than two months into 2014, global investors pulled more money out of emerging-market stock and bond funds than the total amount they withdrew last year.

Emerging-Market Funds Outflow Surpass Total 2013 Sales (Bloomberg)

Less than two months into 2014, global investors pulled more money out of emerging-market stock and bond funds than the total amount they withdrew last year. Investors yanked out $4.5 billion from funds in the week through Feb. 12, extending the total outflow this year to $29.7 billion, according to Barclays Plc, which cited data provider EPFR Global. In 2013, $29.2 billion left funds invested in emerging-market assets. Capital outflows are showing no signs of abating, even as stocks and currencies from developing nations rose this month after the biggest equity losses in January since 2009. BlackRock Inc.’s (BLK) Larry Fink called emerging-market assets cheap, but concerns remain about slowing growth in China, trade deficits in Turkey and the Federal Reserve??s reduction of stimulus. Another factor working against emerging markets is that those investments typically do pay dividends. Those exceptions that pay dividends tend to do so in meager amounts compared to stocks from developed markets.

Written By

Paul Dykewicz is the editorial director of the Financial Publications Group at Eagle Publishing Inc., www.eaglepub.com, of Washington, D.C. Eagle publishes five free, e-letters, 10 weekly trading services and five monthly investment newsletters, Forecasts & Strategies, Successful Investing, Cash Machine, Growth & Dividend Report and The Alpha Investor Letter. He also is the editor of Eagle Daily Investor and the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain."

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