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 Fund companies recorded $710 million in net emerging-market fund
inflows on Thursday alone, according to FactSet Research Systems
Inc, with one such product posting its largest single-day haul ever.
The strong day advanced a three-week long period of inflows for the
emerging-market funds, which track stocks in China, South Korea,
India and a group of other developing countries. The figure doesn't
include a group of so-called leveraged funds that traders use to
amplify bets on index price moves.
The fund buying comes despite concerns that global economic growth
is slowing, particularly in China. China's central bank cut interest
rates on Friday for the sixth time in less than a year. That rate
cut came minutes after Premier Li Keqiang was quoted on state radio
as saying that China will make "reasonable use" of rate and RRR cuts
to keep its economy growing at a reasonable pace.
That move followed remarks Thursday by European Central Bank
President Mario Draghi, who raised the possibility of further easing
measures to counter weak inflation in the euro zone.
Among the funds seeing strong flows was the iShares Core MSCI
Emerging Markets ETF. Its $300.9 million intake, recorded Thursday,
was the largest ever single-day inflow for the three-year-old fund,
according to Melissa Garville, a spokeswoman for the fund's
overseer, BlackRock Inc. The fund manages $8.2 billion in total.
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The $23 billion iShares MSCI Emerging Markets ETF took in $336
million for the day, its strongest flows this month.
The MSCI Emerging Markets benchmark tracked by tens of billions in
ETF assets overall, including EEM, shed 17.9 percent of its value
for the year through its low point for the year, on Aug. 24, but the
index has rebounded by 11.6 percent since then.
Strong flows into the emerging-market funds have accelerated this
month. On Thursday, the research service Lipper said emerging-market
stock funds had recorded three straight weeks of new assets for a
period that ended Wednesday. Over those three weeks, the inflows
totaled $1.6 billion, Lipper said.
Fund investors seem to be taking a rosier short-term view on markets
as high-yielding junk bond funds and stock funds also reported
netting new money.
(Reporting by Trevor Hunnicutt; Editing by Leslie Adler)
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