International and emerging market equity funds tracked by Emerging Portfolio Fund Research (EPFR) saw stronger inflows in November, helped by the decline of the dollar, EPFR said in a statement on Friday. EPFR said flows in November into international equity funds it tracks surpassed those of previous years while flows into dedicated emerging market equity funds - modest for most of this year - turned sharply positive.
A weak dollar makes US products cheaper overseas, which helps US companies improve offshore earnings. But investors can be reluctant to buy US assets if they expect the dollar to weaken further and reduce the value of those investments.
International equity funds tracked by EPFR have now received more inflows from investors year to date than in any year since at least 2000, when EPFR began tracking this fund category.
EPFR said international funds it tracks attracted an estimated $67 billion of net inflows in November. Assets in these funds have increased from $709 billion at the start of 2004 to more than $920 billion in December.
In contrast, US equity funds with combined assets of $1.9 trillion tracked by EPFR received inflows of just $11.5 billion in 2004.
Cambridge, Massachusetts-based EPFR said it tracks about one-third of all international and US equity funds.
"The falling dollar and outperformance of foreign developed and emerging markets equities this year is pulling a huge amount of investor capital into global/international equity funds," said Brad Durham, a managing director of EPFR.
The dollar's weakness helped emerging market equity funds tracked by EPFR, which had mixed fortunes this year through October, make a comeback in November. EPFR said it tracks about 90 percent of emerging market equity funds.
Global emerging market equity funds with about $85 billion in assets, which had sustained outflows of nearly $3 billion this year through October, pulled in $1.3 billion in November.
Asia ex-Japan equity funds with about $54 billion of assets, which had attracted $3.8 billion this year through October, attracted $1 billion in November alone.
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