US-based LatAm equity funds pull in fresh capital in sinking market

US-based LatAm equity funds pull in fresh capital in sinking market

Fixed Income Equity Funds Latin America

Investors in US-based Latin American focused equity mutual and exchange traded funds added to their holdings in the week ended February 24, even in the face of losses in the broader regional stock markets.

There was a net inflow of $34 million for the 27 US-based funds monitored by Lipper, the mutual fund tracking service of data provider Refinitiv. This inflow broke a three week streak of net redemptions. The amount of assets under management (AUM) fell by $297 million, or 2.63%, to $10.9 billion in the latest week. At their peak in January 2011, these Latin American equity-focused funds held nearly $23.5 billion. 

During the latest weekly reporting period, the benchmark MSCI Latin America stock index fell 2.59%. The index has recovered 60.10% from the March 23, 2020 COVID-19 trough, which was its weakest point in more than 15 years. The index still sits 25.79% below the pre-COVID peak in early January 2020.

In the context of overall US mutual funds invested in the global emerging market equity space, the 721 funds tracked saw inflows of $1.7 billion, extending a streak of fresh money intake to 16 weeks. That is the longest stretch of inflows since early 2019, the data shows. However, the AUM fell by $20.4 billion, or 3.5% to $563 billion from the record high level of $583.5 billion the week prior.

Emerging market debt funds had a net inflow of $370 million. AUM of the 271 funds tracked was down by just 0.3% to $68.1 billion.