GEM equity funds suffer largest weekly outflow on record

Emerging market equity funds saw some $6.3bn in outflows during the final week of January, with the GEM sub-sector particularly badly hit as concerns over developing markets intensified.

Figures from EPFR Global show institutional investors, who removed over $5bn, represented the bulk of the EM sellers during a week in which central banks struggled to regain control of their currencies. Aggressive rate hikes in Turkey and then South Africa proved ineffective in strengthening the Turkish lira and South African rand, causing emerging market equities to slump in turn. EPFR said the $6.3bn outflow for the week to 29 January is the largest amount on record in terms of US$ terms, and the largest since the first quarter of 2011 in terms of percentage under assets. Year-to...