New Delhi: Investors seem to have cut their exposure to emerging markets, including India, as overseas investors pulled out over USD 120 million from equity funds focused on Indian market during the third week of July, funds tracking company EPFR Global has said.
"Over USD 120 million was pulled out of India Equity Funds," EPFR Global said and cautioned that "lagging monsoon rainfall threatens to stoke India's already high food inflation and sap rural incomes".
All four of the major fund groups in the emerging market posted outflows ranging from USD 52 million for EMEA Equity Funds to USD 305 million for Asia ex-Japan equity funds.
The redemptions from Asia ex-Japan Equity Funds were the 11th in the past 12 weeks as investors continued to question the outlook for many of the regional markets in light of slowing European and Chinese demand for their exports.
Retail investors pulled money out of EPFR Global-tracked emerging market equity funds for the 20th week running.
According to EPFR "optimism about additional stimulus was tempered by the impact an extended drought in the US could have on global food prices and, by extension, inflation rates."
Meanwhile, interest in EPFR Global-tracked developed market equity funds climbed several notches during the week ending July 18, especially for fund groups offering US or diversified exposure.
US Equity Funds enjoyed solid flows on the back of commitments to large and small cap blend ETFs, which between them accounted for over USD 3.5 billion of the total inflows of USD 6.5 billion for the fund group.
So far this year all US ETFs have absorbed USD 30.5 billion, while actively managed funds have seen net outflows of USD 39.9 billion.
Both of the major diversified developed market equity fund groups took in fresh money with global bond funds absorbing USD 964 million and Pacific equity funds attracting USD 103 million, EPFR said.
First Published: Monday, July 23, 2012, 16:56