>Asian Equity Funds The Unloved Ones (CITI)

■ Foreign liquidity remains buoyant but Asian dedicated equity funds not benefiting — Inflows to EM and Global/International equity funds continued running at billions of dollars for the fifth week since September, yet Asian funds reported outflows. Based on the 1,000 Asian funds tracked by EPFR on a weekly basis, flows turned marginally negative last week to US$37m of outflows compared with small inflows of US$59m two weeks ago.

■ YTD net inflows to Asian funds total US$14b — This covers 71% of the money redeemed in 2008 and contrasts to US$20.4b of fresh money to GEM funds, which is 2.2x last year’s outflows. GEM funds continue to be liked by foreign investors and new money taken in last week remained US$1b+ vs. an initial sign of weakening inflows to Global/International funds (halved for two consecutive weeks to less than US$500m last week). Pacific funds saw inflows for the first time in five weeks after the RBA surprised by raising interest rates on Tuesday.

■ Out of Greater China into India, Korea and TIP — Outflows from China, Hong Kong, Taiwan and Greater China regional funds added up to US$366m last week. By contrast, inflows to India, Indonesia, Korea and Thailand totaled US$304m, the largest in ten weeks. Relative to the size of assets under management (AUM), inflows to Thailand and Indonesia were the strongest, representing 12%-13% of corresponding AUM vs. 0.5% for India funds where inflows were the biggest in dollar amounts.

To see the full report: FUN WITH FLOWS