Emerging market equity funds posted net inflows of $41 billion in the first 10 months of this year, mainly at the expense of US, European and Japan portfolios that have been considered more vulnerable to the credit crisis in the US, according to data provider EPFR Global.

The net inflows for emerging market funds were registered from July onwards, after the fallout from the US subprime mortage crisis. Prior to that emerging market funds were experiencing net outflows.

US, Europe and Japan funds suffered a net outflow of $56 billion in the first 10 months of this year.

With investors still unsure where the sub-prime bodies are buried, they also bailed out of financial and real estate sector funds. Doubts about the outlook for US, European and Japanese economic growth also weighed on energy and consumer goods sector funds.

Just last week, global emerging market equity funds posted the biggest net inflows, or $1.21 billion, of any major equity fund group for that week.

When it came to market-specific funds, investors moved towards the larger emerging economies.

ôInvestors globally have been gravitating to the sounder economic and fiscal story that emerging markets represents, but the ever-weakening dollar, if it turns into a destabilizing rout, could even damage the current rosy sentiment of investors towards emerging markets,ö says Massachusetts-based Brad Durham, managing director at EPFR Global.

Net inflows to Brazil, South Korea, China, Greater China and Russia country funds totalled $878 million while BRIC equity funds took a net of $480.6 million. Combined, that made up 56% of last weekÆs net inflows into all emerging markets funds, up from 30.5% the previous week.