Fund flows: Another good week for Russia

Asia doing better, outflows from GEM funds. The picture was grim for GEM funds, with outflows of $662 mln more or less equally spread out between traditional funds and ETFs, after last week's gains of $3.2 bln. However, EMEA funds performed slightly better, with inflows rising to $189 mln versus $84 mln last week. Among BRIC countries, only China fared better than Russia, with inflows of $247 mln, while India and Brazil lagged slightly with inflows of $54 mln and $74 mln. In general, more money was directed to Asian funds ($589 mln versus inflows of $219 mln a week ago) while LatAm funds raised just $160 mln compared to $846 mln last week.

Doing well for now. The data indicates that enthusiasm has cooled after the QE3-sparked euphoria two weeks ago; however, the poor sentiment that hit the markets on Wednesday has so far not affected most EM funds that much. Russia did relatively well, confirming our view that it is a late-cycle market, and we believe Russia's performance will now depend on whether the European problems stop hurting global sentiment and whether the announced stimulus measures will be followed by an improvement in the global economy.