Emerging-markets funds emerging as investor favorite

With developing economies booming, funds see large increase in net inflows; No. 1 for November

Dec 30, 2010 @ 2:32 pm

By Darla Mercado

Emerging-markets mutual funds recorded the highest net inflows of any fund category in November as economic prospects in the U.S. and Europe continued to languish.

Mutual funds in the diversified-emerging-markets category ranked No. 1 for net flows in November, raking in $4.6 billion that month, according to research from the Financial Research Corp. Year-to-date, flows into the category have reached $48.9 billion, up from $31.7 billion in the year-ago period.

The world-bond and world-allocation categories — Nos. 2 and 3 on the list — have also seen a pickup in inflows during the year. World bonds gained $3.2 billion in net flows last month, bringing their year-to-date flows to $33 billion, up from $20 billion in the year-ago period.

Meanwhile, the world-allocation category gathered $3 billion during November, bringing year-to-date net inflows for 2010 to $19.6 billion — more than double the amount for the comparable period in 2009.

The fixed-income category had been a major seller during 2009 and part of 2010, but now emerging markets are garnering much of that focus, said Veer Virkar, a research analyst at FRC. “Expected returns for emerging markets are much higher versus growth prospects in the U.S. right now,” Mr. Virkar. “It's a function of economic activity in the U.S., as well as the fact that emerging markets are performing.”

International funds have also been the top-selling funds for the month. Vanguard's Total International Stock Index Ticker:(VGTSX) brought in some $2.15 billion in fund flows last month, making it the top gainer for November. Templeton Global Bond Fund Ticker:(TPINX) followed, with $1.53 billion in net flows for November. The iShares Russell 2000 Index Fund Ticker:(IWM) was third on the list, with $1.49 billion in net flows.


What do you think?

View comments

Recommended next


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print