Political Risk Latin America Blog @PolRiskLatam

The end of the EM affair?

Posted in News and Articles, Political Risk by politicalrisklatam on February 18, 2011

by Jonathan Wheatley for Financial Times – Beyond Brics, February 18th, 2011.

Emerging market equities strongly outperformed those in developed markets during the second half of 2010 but as the chart shows after the break, the world has turned upside down since January.

According to fund tracker EPFR Global, investors withdrew a net $5.44bn from EM equity funds during the week to Wednesday. Since mid-January, a whopping $18.5bn has flowed from EM funds to DM funds, most of it going to US equities. So is the EM love affair over?

HSBC, which has a lot at stake in emerging markets, doesn’t think so. Garry Evans, global equity strategist, wrote to clients on Friday: “We remain comfortable with the view that EM will outperform DM during 2011.”  (continue reading… )



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