Chart No. 210
Macro
6 min read
Free
Emerging-market debt is getting its buyers back.
Three years of outflows, then twelve weeks of inflows. The buyers coming back are not the tourists who left.
Nadia Brennan
Founder and editor
Illustrative data based on public sources.
EMB · EM hard currency
Emerging-market hard-currency bond funds took in $4.1 billion over the last twelve weeks, after three years in which investors pulled almost $40 billion.
Who is buying
The flows are not coming from crossover funds chasing yield. They are coming from dedicated EM mandates and pension funds that had cut their allocations to the bone. That kind of money is slower to arrive and slower to leave.
What could stop it
A stronger dollar, mostly. Our chart of the week at the bottom shows every period of sustained inflows since 2010, and almost all of them ended when the dollar rose more than 5% in a quarter.
Not investment advice. Carry writes about markets; it does not tell you what to buy or sell. Charts use illustrative data unless a source says otherwise.
