Global equity markets skidded lower during the third week of May as optimism that a $950 billion stabilization plan cooked up by the European Union and IMF will limit the damage done by Greece's fiscal meltdown largely evaporated. Flows into and out of EPFR Global-tracked unds reflected the uncertainty and heightened risk aversion: redemptions from High Yield Bond Funds topped $1 billion, seven of the nine major sector fund groups posted outflows an Europe Equity Funds had their worst week since late April, 2008.

Investors, however, did pull $33.9 billion out of money market funds, suggesting that sentiment has not turned to the point where capital preservation is the overriding concern, and inflows into Emerging Market Bond Funds also pointed to a continuing desire to put money to work. But a general flight to gold was reflected in another $1 billion plus week for Commodity Sector Funds and US Bond Funds were second on the small list of major fund groups that attracted fresh money during the week ending May 19.

Overall, EPFR Global-tracked Equity Funds posted net outflows of over $12 billion while Bond Funds eked out inflows of $212 million.

While the prospect that Greece's troubles would trigger another dip in Europe's economic growth sunk investor sentiment globally, it was remarkable that the combined Emerging Market Equity Funds managed net inflows during the week, albeit a paltry $4.9 million.

Latin America Equity Funds posted their sixth straight week of outflows and EMEA Equity Funds their third while outflows from the diversified Global Emerging Market Equity (GEM) Equity Funds hit a 14 week high. Asia-ex-Japan Equity Funds were the only major emerging markets fund group to post inflows during the week, taking in $248 million, as some investors decided that the recent correction of China's equity markets had created some attractive entry points. Flows into China Equity Funds climbed to a four week high. Taiwan Equity Funds also had a good week, posting their biggest weekly inflow since early February ahead of data showing growth in 1Q10 surged to a three-decade high.

Outflows from EMEA Equity Funds were driven by fears that the Eurozone's problems will spill over into Emerging Europe in the form of tighter credit and weaker demand for the exports of CE3 nations, the Baltic states and Russia . But faith in Africa 's story continues to hold up: they recorded their 37th consecutive week of inflows.