Investors pull out $24.5 bn from emerging market equity funds

Stock market volatility forced investors across the globe to pull out $24.5 billion from emerging market equity funds in the January-March quarter of 2011, including over $ 2 billion from funds focused on BRIC markets.

"The BRIC - Brazil, Russia, India and China - markets and funds have not fared so well, with investors tending to focus on their efforts to control rising prices rather than the growth that is helping fuel that inflation," according to data complied by international fund tracking firm EPFR Global.

For the quarter, the group of equity funds saw outflows of $ 24.5 billion, their roughest quarter since investors pulled out $ 25.6 billion during the third quarter of 2008.

The equity funds saw an outflow of $ 10.31 billion in Asia (excluding Japan) in the first quarter of the 2011 calender year, with $ 2.35 billion taken out from BRIC countries.

However, emerging market equity funds registered their highest weekly inflow of $ 2.6 billion during the week ended March 30 since the first week of January, the report noted.

The inflows into emerging markets totalled $2.6 billion in the seven-day period ending March 30, following outflows in eight of the previous nine weeks.

Investors have also pumped more money into funds focused on developed economies on hopes those markets will improve.

For the quarter, developed market equity funds registered inflows of $ 56.97 billion, their best start to a year since they absorbed $ 63.3 billion during the first quarter of 2006.

Japan equity funds witnessed net inflows of $ 3.3 billion during the quarter, the bulk of which came prior to the earthquake that shook the country in March.