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Investors See Latin America Turning, Become Cautious of Japan

After net outflows every year from 2011-2015, Latin American Equity Funds had a surge. Meanwhile, “Abenomics” is on the voters’ chopping block.

In the week ending October 20, investors showed they have hopes for changes in Latin America that will lead to a better economic performance in the region. After posting net outflows every year from 2011-2015, Latin America Equity Funds had a surge of inflows that totaled roughly $450 million.

China was once the darling recovery and reform story investors wanted, but investors are re-examining Asia and taking a closer look elsewhere, according to Emerging Portfolio Fund Research Global.

Japan was not exempt from that re-evaluation. The impending election, and the possibility that it will either give incumbent Prime Minister Shinzo Abe a mandate to take a harder line with North Korea or send a signal voters are tired of “Abenomics,” prompted investors to hedge their bets in mid-October. Japan Equity Funds recorded their biggest outflow since EPFR Global started tracking them in 2001.

Meanwhile, money also continues to flow into European Equity Funds. All Western European Funds saw inflows north of $1 billion and European Equity exchange traded funds are still having a good year, both in terms of attracting fresh money and outperforming their actively managed counterparts.


Interestingly, European Bond Funds saw modest outflows for the second time in the past three weeks. Investors, perhaps, are leery of the effects of the European Central Bank unwinding its balance sheet. Meanwhile, while rates remain low and another hike is expected in December, money continues to pour into U.S. Bond Funds.

Fund flow data provided by EPFR Global, an Informa Financial Intelligence company.

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