EM bond funds see outflows for sixth straight week: EPFR Global

By Rebecca Melvin

New York, Aug. 24 – Redemptions from emerging markets bond funds climbed to an eight-week high, with investors pulling more than $1 billion from both emerging markets and Europe bond funds for the week ended Aug. 22, and raising to six the number of weeks the EM debt space has seen outflows, according to fund flows and asset allocation data tracker EPFR Global.

In terms of global bond funds, the current outflow streak has risen to three weeks.

Investors withdrew funds from emerging markets bonds amid negative headlines, including downgrades of Turkey by two ratings agencies on Aug. 17 and reports related to the South Africa parliament’s approval of a motion last month that considers changes to the constitution allowing the government to seize farmland without providing compensation, EPFR said in its weekly report.

South Africa bond funds posted their biggest outflow on record, while Argentina equity funds extended their longest run of outflows in more than seven years.

Meanwhile, investors committed fresh money to Latin America corporate bonds for the fifth time in the past seven weeks. But most other groups by currency, duration, credit quality and geographic focus experienced net redemptions.

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