EM local-, hard-currency bond funds see $1.31 billion outflow for latest week: EPFR Global

By Rebecca Melvin

New York, Sept. 14 – Emerging markets bond funds posted their biggest outflow since late June, with a combined $1.31 billion taken out of local- and hard-currency funds for the week ending Sept. 12, according to fund flows and asset allocation data tracker EPFR Global.

Investors pulled $908 million from local-currency funds, which was twice as much as from hard-currency funds, where $403 million was redeemed.

For the year to date, hard-currency funds have had $5.15 billion in outflows, and local-currency funds have had an outflow of $18.54 billion.

At the country level, China bond funds posted inflows for the fifth straight week while redemptions from Brazil bond funds hit a five-week high.

Analysis of global emerging markets bond fund allocations for Latin America shows U.S.-domiciled fund managers prefer Brazil to Mexico, and are more comfortable with riskier regional markets, including Venezuela, whose allocation among dedicated Latin America Bond Funds was extinguished in the fourth quarter of 2016, according to EPFR’s weekly report.

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