OCTOBER 9, 2015
EQUITY STRATEGY
EQUITY FUND FLOWS WEEKLY:
BEST INFLOW TO RUSSIA SINCE APRIL
Source: EPFR Global, Gazprombank estimates
EM fund flows, past year, $ mln
15,000
10,000
5,000
0
-5,000
-10,000
-15,000
Source: EPFR Global, Gazprombank estimates
Russia-dedicated fund flows, 3m,
$ mln
0.0%
-100
-1.0%
-200
-2.0%
-300
-3.0%
9 OCT
1.0%
0
25 SEP
2.0%
100
11 SEP
200
28 AUG
In terms of the regional breakdown, Emerging Asia (-$463 mln) was weighed down by
Taiwan (-$207 mln), China and South Korea (-$190 mln). Emerging Europe added a total
of $154 mln thanks almost entirely to Russia and Emerging Europe funds (+$46 mln), while
Latin America (-$56 mln) saw scant interest aside from Brazil and Mexico (-$17 mln).
4,000
3,000
2,000
1,000
0
-1,000
-2,000
-3,000
-4,000
-5,000
31 JUL
Notably, EM flows contrasted sharply with index performance, as MSCI EM jumped
7.4% over the period (see chart of the week on the following page). Fund flows are
typically a lagging indicator and thus next week’s data should catch up with this
move, particularly given that the minutes from the FOMC’s September meeting
(widely perceived as dovish on rate hikes) were released after the latest set of EPFR
data was compiled.
GEM fund flows, past year, $ mln
14 AUG
Risk-acceptant investors were eager to pick up the hardest-hit Russian names
following the September sell-off throughout emerging markets. Russia was the
standout performer in the BRICS category, outperforming China (-$144.5 mln), Brazil
(-$41.9 mln), India (+$37.0 mln) and South Africa (+$79.5 mln). The country also stood
out relative to EM equities, with GEM funds reporting a minor outflow (-$54.0 mln) and
the all EM category (GEM plus country-dedicated funds) losing $529.4 mln.
Andrey Klapko
+7 (495) 983 18 00 ext. 21401
[email protected]
OCT '14
NOV '14
DEC '14
JAN '15
FEB '15
MAR '15
APR '15
MAY '15
JUN '15
JUL '15
AUG '15
SEP '15
OCT '15
Other factors supporting interest in the Russian market over the past week included
news flow on the government’s oil and gas sector taxation debate, heightened
expectations that the Fed will refrain from interest-rate hikes through at least year end,
and the pricing of a premium into the oil market as a result of the latest round of
conflict in the Middle East.
Alexander Nazarov
+7 (495) 980 4381 ext. 54381)
[email protected]
OCT '14
NOV '14
DEC '14
JAN '15
FEB '15
MAR '15
APR '15
MAY '15
JUN '15
JUL '15
AUG '15
SEP '15
OCT '15
The past week’s fund flow performance seems unsurprising given the 9.7% jump in the
Brent price and its strong YTD correlation of 0.84 with the RTS Index (+6.9% over the
week). The uptrend in oil also provided support to the ruble, which gained another
1.5% against the dollar and currently shows a 5.9% MTD gain. The pick-up in Russia
flows over the past two weeks has boosted the country’s share as a percentage of EM
AUM from 3.9% to 4.2%. While still very low on a historical basis, it is nonetheless
encouraging for those anticipating mean reversion to the long-term average of 6-7%.
Erik DePoy
+7 (495) 983 18 00 ext. 54440
[email protected]
17 JUL
According to the latest data from EPFR Global, the Russian equity market saw an
inflow of $100.5 mln (0.33% of AUM) during the week to October 7. This marks the
largest amount of allocations to Russia since April and reduces the YTD outflow to
$1.03 bln (2.98% of AUM). All of the money arrived through Russia-dedicated funds
(+$103.9 mln, +$149.0 mln YTD), with global and index-tracking funds withdrawing
$3.4 mln. Russia ETFs contributed $63.6 mln (2.05% of AUM), raising the YTD inflow
in this category to $147.2 mln, while traditional asset managers reported $40.3 mln in
new funds. Institutional investors were on the buy side, adding $124.5 mln, while retail
accounts (-$23.8 mln) remained cautious.
RUSSIA FLOWS, PAST 3M
% OF AUM (RHS)
Source: EPFR Global, Gazprombank estimates
Research Department
1
Copyright © 2003-2015.
Gazprombank (Joint Stock Company)
OCTOBER 9, 2015
EQUITY STRATEGY
EM fund flows vs. MSCI EM index, YTD
12,000
10,000
8,000
6,000
4,000
2,000
0
-2,000
-4,000
-6,000
-8,000
-10,000
-12,000
1,100
1,050
1,000
950
900
850
800
750
EM FUND FLOWS, $ MLN
OCT 15
SEP 15
AUG 15
JUL 15
JUN 15
MAY 15
APR 15
MAR 15
FEB 15
JAN 15
700
MSCI EM INDEX (RHS)
Source: Bloomberg, EPFR Global, Gazprombank estimates
Research Department
2
Copyright © 2003-2015.
Gazprombank (Joint Stock Company)
OCTOBER 9, 2015
Russia country flows, 3m, $ mln
Russia country flows, past year, $ mln
1.5%
0.6%
0.4%
0.2%
0.0%
-0.2%
-0.4%
-0.6%
-0.8%
-1.0%
-1.2%
-1.4%
-1.6%
RUSSIA FLOWS, PAST 3M
-200
-300
-1.0%
-400
% OF AUM (RHS)
RUSSIA FLOWS, PAST YEAR (RHS)
Source: EPFR Global, Gazprombank estimates
400
350
300
250
200
150
100
50
0
-50
-100
-150
-200
-250
RUSSIA ETF FLOWS, PAST YEAR (RHS)
OCT '15
2%
0
0%
-50
-2%
-100
Source: EPFR Global, Gazprombank estimates
9 OCT
2 OCT
11 SEP
RUSSIA ETF FLOWS, 3M
% OF AUM
25 SEP
-6%
18 SEP
-200
4 SEP
-4%
28 AUG
-150
10 JUL
OCT '15
SEP '15
AUG '15
JUL '15
JUN '15
MAY '15
APR '15
MAR '15
FEB '15
JAN '15
-6%
50
21 AUG
-4%
4%
100
14 AUG
-2%
6%
150
7 AUG
0%
200
31 JUL
2%
8%
24 JUL
4%
250
17 JUL
6%
DEC '14
SEP '15
Russia ETF flows, 3m, $ mln
8%
NOV '14
% OF AUM
Source: EPFR Global, Gazprombank estimates
Russia ETF flows, past year, $ mln
% OF AUM (RHS)
Source: EPFR Global, Gazprombank estimates
Russia institutional vs. retail flows, 2013 to date, $ mln
BRIC cumulative flows, past year, $ mln
3,000
2,000
1,000
0
-1,000
-2,000
-3,000
-4,000
-5,000
-6,000
-7,000
-8,000
10,000
0
-10,000
-20,000
INSTITUTIONAL
SEP '15
RETAIL
RUSSIA
Source: EPFR Global, Gazprombank estimates
Research Department
CHINA
INDIA
OCT '15
SEP '15
AUG '15
JUL '15
JUN '15
MAY '15
MAR '15
FEB '15
JAN '15
DEC '14
NOV '14
-40,000
OCT '14
MAY '15
JAN '15
SEP '14
MAY '14
JAN '14
SEP '13
MAY '13
JAN '13
-30,000
APR '15
OCT '14
AUG '15
NOV '14
OCT '14
-500
JUL '15
-1.5%
9 OCT
2 OCT
25 SEP
18 SEP
11 SEP
4 SEP
28 AUG
21 AUG
7 AUG
14 AUG
31 JUL
24 JUL
17 JUL
-500
-100
-0.5%
JUN '15
-400
0
0.0%
MAY '15
-300
100
APR '15
-200
0.5%
MAR '15
-100
200
FEB '15
0
300
1.0%
JAN '15
100
400
DEC '14
200
10 JUL
EQUITY STRATEGY
BRAZIL
Source: EPFR Global, Gazprombank estimates
3
Copyright © 2003-2015.
Gazprombank (Joint Stock Company)
HQ: 16/1 Nametkina St., Moscow 117420, Russia. Office: 7 Koroviy val St.
Research Department
+7 (495) 983 18 00
EQUITY SALES
FIXED INCOME SALES
+7 (495) 988 23 75
+7 (495) 983 18 80
EQUITY TRADING
FIXED INCOME TRADING
+7 (495) 988 24 10
+7 (499) 271 91 04
Copyright © 2003-2015. Gazprombank (Joint Stock Company). All rights reserved
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necessarily being accurate. With the exception of information directly pertaining to Gazprombank, the latter shall not be liable for the accuracy or completeness of any information shown herein. All opinions and judgments
herein represent solely analysts’ personal opinion regarding the events and situations described and analyzed in this report. They should not be regarded as Gazprombank’s position and are subject to change without notice,
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