However, investors have started moving back to emerging market equities during the final days of March, it said.
According to the report, $41.05 billion has flown out of emerging market equities funds in January-March period of 2014, against an inflow of $29.78 billion in the same period last year.
"Emerging market equity funds endured a rough start to 2014 as the winding down of the Federal Reserve's quantitative easing programme, a crowded electoral calendar, mixed economic data from China and events in Ukraine gave both institutional and retail investors plenty of good reasons to keep a distance," the report added.
It, however, said the final days of March saw equity funds focused on emerging markets make a "modest but perceptible start on reversing the more than $40 billion worth of outflows -– a quarterly record –- that they chalked up during the first three months of 2014."
EPFR said rebound was mainly due to institutional investors as they were the main drivers of overall flows into equity funds.
At the country-wise level, equity funds focused on China witnessed a withdrawal of $3.01 billion in January-March period of 2014, followed by Korea ($1.56 billion), Mexico ($1.10 billion), India ($870 million), Brazil ($602 million) and Russia ($345 million).
The report said "flows into India equity funds began to rebound as investors responded to better inflation and current account deficit numbers and hopes of a more business friendly government in the aftermath of May's general elections."