All four major emerging market equity fund groups tracked by EPFR Global recorded modest inflows during the week ending February 12. The combined emerging market equity funds received net inflows of $463 million, bringing year-to-date net inflows to $2.5 billion.

The numbers so far this year support fund managers who believe that emerging equity markets will bounce back sooner than US or European markets. In 2008, total net outflows from emerging market equity funds reached $48.9 billion.

Asia ex-Japan equity funds posted net inflows of $218 million while global emerging markets equity funds posted net inflows of $137 million. The breakdown for Europe, Middle East, and Africa (EMEA) equity funds and Latin America funds tracked by EPFR Global were not available. Based in Massachusetts, EPFR Global tracks around $11 trillion of assets in traditional and alternative funds worldwide.

Flows into Asia ex-Japan equity funds were broadly based, with Korea, China, Greater China and Hong Kong equity funds all taking in between $40 million and $145 million. Korea equity funds, which started 2008 with a 17-week, $1.2 billion outflow streak, have shown a turnaround in performance and have taken in $317 million in net inflows so far this year.

The performance of emerging market equity funds has been impressive considering overall equity funds tracked by EPFR Global showed a net outflow of $6.2 billion last week in addition to a new outflow of $4.4 billion in the previous week.

"The second week of February offered investors little to cheer about," says EPFR Global in a report. "US lawmakers struggled to agree on the terms of a stimulus package, new data reinforced the perception the European central bank has let events run ahead of it, layoffs continued to mount and a plan to boost America's financial sector was greeted with a marked lack of enthusiasm."

The latest policy initiatives in the US -- a $2 trillion stabilisation plan for the financial sector and an $800 billion plus stimulus package -- "have been greeted with underwhelming enthusiasm by investors", according to EPFR Global.

The benchmark Dow Jones index slid back below the 8,000 mark last week and US equity funds suffered net outflows of $6.97 billion during the week ending February 12. The bulk of that was due to outflows from large-cap exchange-traded funds.