Emerging bond funds see biggest weekly inflow on record-JPMorgan

viernes 8 de julio de 2016 03:21 GYT

LONDON, July 8 (Reuters) - Emerging market bond funds received $3.3 billion over the past week, JPMorgan said on Friday, the largest weekly inflow since it started tracking the data in 2004.

While Britain's June 23 vote in favour of leaving the European Union caused initial knee-jerk selling of emerging assets, those flows have reversed as bond yields in the developed world collapsed to ever new lows and the U.S. Federal Reserve signalled it would likely postpone raising rates.

With more than $10 trillion worth of debt now estimated as carrying sub-zero yields, more and more funds are flocking to higher-return emerging bonds.

JPMorgan, which runs the most widely used emerging bond indexes, said the resurgence in inflows was broad-based and benefiting both hard and local currency debt.

It said this was the first time since early 2013 that both segments had received inflows in excess of $1 billion each.

So far this year, emerging fixed income funds have absorbed a total of $12.1 billion, the bank estimates, contrasting with 2015 outflows of $14.4 billion.

However, flows to debt in local currencies remain in negative territory, amounting to minus $3.2 billion.

The picture is less bullish on emerging equities, which continue to suffer from sluggish economic growth across the developing world and the prospect of more slowdowns in China.

While JPM data showed emerging equity funds receiving $616 million in the past week, the sector has seen net outflows of $11.2 billion year-to-date, having seen a whopping $64 billion flee in 2015 and losing $28.5 billion in 2014. (Reporting by Sujata Rao; Editing by Gareth Jones)