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Investors shun global emerging markets

Investors are turning their back on global emerging markets according to the Investment Management Association fund statistics for April.

According to the IMA, the Global Emerging Markets sector saw the biggest outflow of net retail money in April, with 243.1m being removed from the funds in the peer group.

Instead, investors continue to prefer bonds with the Corporate Bond sector attracting net retail inflows of 638.7m in April. This is the sixth month in a row as the most popular asset class among investors.

The outflow of retail money in emerging markets is at odds with the renewed enthusiasm of fund managers to the area.

The most recent monthly survey from Bank of America Merrill Lynch (see Fund Strategy, May 25), showed that global managers were overweighting their fund to global emerging markets and underweighting Britain, continental Europe and Japan.

Overall, the IMA recorded total net retail sales of 2.1 billion, up from 1.5 billion in April 2008. Bond funds accounted for 1 billion of this, while equity funds contributed 579m.

April also saw a large rise in Isa investment, with most of the money most likely coming before the end of the tax year. British domiciled investment fund Isas saw a net inflow of 671.4m in April, a 93% rise compared with the inflow of 347.7m in March. The inflow was 44% greater than in April last year.

The most popular sector for Isa investment, in both net and gross terms, was Cautious Managed.
l See p11 news story.



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