iShares sees healthy inflows into European and international developed equities

But global slowdown takes its toll on investor's appetite for emerging markets

iShares, the world's largest provider of Exchange Traded Funds (ETFs), has seen investor's appetite for the emerging markets decline while they flock to iShares ETFs providing exposure to European and international developed equities.

Over the past six weeks, iShares has seen healthy inflows of over $3 billion into European and international developed equities.

Andrea Morresi, head of sales for iShares Europe, commented: "The second quarter of 2008 has seen the market focus on the strong possibility of a global slowdown and, indeed for some countries, recession.

As this slowdown occurs, all regions will be affected, however some more than others.

The areas most affected are those that have had the strongest run beforehand, for example in emerging markets such as China.

He continued: "To that end it is clear that Emerging Asian economies have seen the brunt of this sell off.

For example, the equity markets in Vietnam are nearly down 60% and China down 50% from October 2007 - at the most extreme - but, in general, stronger falls than their developed counterparts.

The risk premium in the emerging economies, which plays out to an advantage in a bull market, is showing its other side in a downturn.

To that end, iShares clients have reflected this in their appetite for European and international developed equities and significantly, less so for the emerging markets.

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