Emerging-Market Funds Outflow Surpass Total 2013 Sales

Hanumann, CC-By-2.0

Emerging-Market Funds Outflow Surpass Total 2013 Sales (Bloomberg)

Less than two months into 2014, global investors pulled more money out of emerging-market stock and bond funds than the total amount they withdrew last year. Investors yanked out $4.5 billion from funds in the week through Feb. 12, extending the total outflow this year to $29.7 billion, according to Barclays Plc, which cited data provider EPFR Global. In 2013, $29.2 billion left funds invested in emerging-market assets. Capital outflows are showing no signs of abating, even as stocks and currencies from developing nations rose this month after the biggest equity losses in January since 2009. BlackRock Inc.’s (BLK) Larry Fink called emerging-market assets cheap, but concerns remain about slowing growth in China, trade deficits in Turkey and the Federal Reserve’s reduction of stimulus. Another factor working against emerging markets is that those investments typically do pay dividends. Those exceptions that pay dividends tend to do so in meager amounts compared to stocks from developed markets.

Paul Dykewicz

Paul Dykewicz is the editor of StockInvestor.com and the editorial director of Eagle Financial Publications in Washington, D.C. He writes and edits for the website, as well as edits investment newsletters, time-sensitive trading alerts and other reports published by Eagle. He also is an accomplished, award-winning journalist who has written for Dow Jones, USA Today and other publications, as well as served as business editor of a daily newspaper in Baltimore. In addition, Paul is the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain." He received his MBA in finance from Johns Hopkins University, where he was a two-time president of the school's Finance Club. In addition, Paul has a bachelor's degree from the University of Michigan and a master's degree in journalism from Michigan State University. Outside of work, Paul volunteers with a faith-based organization to assist the poor in Southeast Washington, D.C., to learn personal finance skills to lift themselves out of debt.