However, efforts by the new Japanese prime minister to weaken the yen had knock-on effects in other regions and withdrawals from Korean funds soared to record levels. Only one quarter of Korean equity funds attracted capital in the first week of the month as fears for the country’s export competitiveness took hold.
Inflows into emerging market equity funds elsewhere reached $65bn, with diversified EM and China funds attracting the majority of the money.
Smaller markets, including Vietnam, Thailand and the Philippines enjoyed steady inflows, while Colombian equity funds recorded their second highest weekly inflow on record.
Fears of an appreciating euro, however, caused a surge in outflows from EMEA equity funds, and redemptions from Emerging Europe and Turkey equity funds reached ten- and 104-week highs respectively.
Redemptions from Europe equity funds as a whole were around $264m, although they accelerated as the week progressed. There was an uptick in one market, with inflows into French equity funds reaching their highest level since Q3 2011, ending a 19-week outflow streak.
Real estate boom
Year-to-date flows into real estate funds almost touched $4bn, as investor appetite for higher yield and lower volatility assets continued apace. Infrastructure and telecoms funds were the only sector funds to experience net redemptions.
Utilities sector funds, unpopular in 2012, posted their second biggest weekly inflow since the beginning of last year.
Bond fund blues
Bond funds endured a more difficult start to the month, as global tracked bond funds were outgained 3-1 or greater by equity funds and UK bond funds saw their biggest outflow since mid-October.
High yield bonds saw their biggest collective outflow for 11 weeks, and Europe high yield bond funds’ 27 weeks of inflows came to an end.
There was good news for emerging markets local currency bond funds, however, as inflows reached their highest level on record, although redemptions from hard currency funds hit a seven year high.
Balanced funds also continued their strong start to 2013 as inflows bypassed the $6bn mark, while Swedish funds attracted $100m in the first week of the month.
