Investors are leaving Emerging Markets. This time there are no clear reasons to return.

Share (in %) of the months when Emerging Markets (EM) experienced an outflows from local equity and debt is the first time below 20%. In 2005 – 2021 it was 60% or above. The year is not over, but there is only 40% of the year left to catch up. Hardly we will see inflows in all the months left.

So this chart shows a reversal of a 17+ year trend.



What are the reasons?

• Fears of global recession and inflation
• US Fed raising interest rates ready to compromise economic growth to fight inflation
• Strong dollar
• China slow down

And these factors are non-reversable so there is no clear reason/factor to hope that investor’s money that are leaving EMs will start to return in the coming years.

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Tags: Emerging Markets