US-based LatAm equity funds pull in fresh capital for ninth week

US-based LatAm equity funds pull in fresh capital for ninth week

Asset Management Bonds Debt Capital Markets Equity Fixed Income Funds Latin America Caribbean

Investors in US-based Latin American-focused equity mutual and exchange traded funds added to their holdings for a ninth consecutive week, marking the longest stretch of net inflows since September 2017, fresh data showed.

In the week ended January 6, there was a net inflow of $21.6 million into the 27 US-based funds monitored by Lipper, the mutual fund tracking service of data provider Refinitiv. The amount of assets under management (AUM), however, slipped by 0.54%, or $61.8 million, to $11.4 billion in the latest week. At their peak in January 2011, these Latin American equity-focused funds held nearly $23.5 billion. For the whole of 2020, these funds had a net outflow of $1.129 billion, ending a four-year streak of net inflows.

During the latest weekly reporting period, the benchmark MSCI Latin America stock index dipped 0.39%. The index has steadily climbed from its March 23 bottom, its weakest point in more than 15 years. The index has gained back more than three-quarters of the ground it lost since then, but still sits nearly 18 percent below its most recent peak just over a year ago.

In the context of overall US mutual funds invested in the global emerging market equity space, they attracted an additional net $260.1 million, marking a ninth consecutive week of inflows for the 719 funds in the sector. The AUM rose 1.92%, or nearly $10 billion, to $530 billion. In the context of annual activity, 2020 marked an increase in AUM but also the sharp contrast of being the worst ever for net outflows, which amounted to a record $17.7 billion.

Emerging market debt funds had a net inflow in the latest week of $148.1 million. AUM of the 274 funds tracked was up just 0.06%, or $38.7 million, to $67.1 billion. In 2020, this sector saw an outflow of $139 million, a second consecutive year of cash being withdrawn.