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From Precy Dumlao, Opalesque Asia:
The commodities fund sector posted their second consecutive record outflow as investors react negatively to the Eurozone debt crisis and a stronger U.S. dollar. Instead, investors are allocating their money to money market and bond funds, according to data provider EPFR.
Out of the nine major equity fund groups, only two groups attracted fresh inflows whereas the combined bond funds posted their second biggest weekly inflow year-to-date.
"Despite the minimal returns and risks of currency depreciation, flows into Money Market Funds hit a 22 week high as YTD outflows dropped to $32.9bn. During the same period last year net redemptions totaled over $420bn. Flows into Emerging Markets Local Currency Bonds Funds jumped to their highest level in 29 weeks, suggesting that interest in yield and protection from dollar weakness remains strong," EPFR said in its report.
The month of May saw the commodities sector struggling to attract fresh inflows and was, in fact hit by sell offs. The emerging market equity funds attracted a net $265.3m as of May 11, and reduced YTD outflows to $5.7bn.
Commodities slid early this month on reports that George Soros and other investors were dumping precious metals, particularly gold and silver. The steepest decline ...................... To view our full article Click here
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