LatAm, Brazil Equity Flows Stay Positive

Flows into the LatAm and Brazil equity funds tracked by EPFR closed the week ended December 10 on a positive note, according to the service. Brazil equity funds saw inflows of $71.4m, marking the third consecutive week of net inflows for the asset class. Six out of the past seven weeks have seen positive inflows into Brazil funds, which today have total assets of $5.5bn. YTD outflows stand at a relatively small $148.9m. In LatAm equities, the YTD outflows account for a larger portion of total assets under management (AUM). Some $5.49bn in funds have fled the region’s equity funds tracked by EPFR, representing 16.5% of total AUM, which stand at $11.8bn today. In the week ended December 10, the outflows were $53.7m, or 0.5% of AUM. Negative performance of the region’s indices has contributed to a $17.0bn drop in total AUM for LatAm funds. The recent positive flows into Brazil and LatAm may be driven by a withdrawal fatigue – there isn’t much left to pull out – as well as the fairly consistent forecasts from research shops that 2009 may see a substantial bear market rally in EM equities, says EPFR analyst Brad Durham. “Sellside research reports have been delivering fairly consistent forecasts for 2009 that includes some 30%-60% in equity upside next year,” remarks Durham.