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EM Flows Weekly Turning the tide_ EM bond funds see the largest inflow since early October
2025-02-25 02:06

Summary of J.P. Morgan's Emerging Markets Research Call Industry Overview - The report focuses on the Emerging Markets (EM) sector, specifically analyzing fund flows in EM bonds and equities as of February 21, 2025. Key Points and Arguments Fund Flows - Overall EM Bond Flows: - EM bond funds experienced inflows of 539million∗∗,asignificantincreasefromoutflowsof∗∗−539 million**, a significant increase from outflows of **-78 million the previous week, marking the largest inflow in 19 weeks [7] - Year-to-date (YTD) flows to EM bonds are at -3.0billion∗∗[7]−∗∗EMEquityFlows∗∗:−EMequityfundssawinflowsof∗∗3.0 billion** [7] - **EM Equity Flows**: - EM equity funds saw inflows of **504 million, recovering from outflows of -612million∗∗thepreviousweek[7]−YTDflowstoEMequitiesareat∗∗−612 million** the previous week [7] - YTD flows to EM equities are at **-7.6 billion [7] Currency-Specific Insights - Hard Currency vs. Local Currency: - Hard currency bond inflows increased to 449million∗∗from∗∗449 million** from **137 million, while local currency bond inflows accelerated to 90million∗∗from∗∗−90 million** from **-214 million [7] - EM ex-China saw inflows of 146million∗∗,whileChina−focusedfundsexperiencedoutflowsof∗∗−146 million**, while China-focused funds experienced outflows of **-57 million [3][7] Regional Performance - Regional Fund Flows: - Asia ex-Japan funds saw outflows of -30million∗∗,whileEMEAandLatinAmericafundshadinflowsof∗∗30 million**, while EMEA and Latin America funds had inflows of **215 million and 89million∗∗,respectively[3][7]−Amongregionalfunds,Asiaex−Japanhadinflowsof∗∗89 million**, respectively [3][7] - Among regional funds, Asia ex-Japan had inflows of **136 million [38] ETF vs. Non-ETF Flows - ETF Performance: - EM equity ETFs saw inflows of 2.2billion∗∗,whilenon−ETFfundshadoutflowsof∗∗−2.2 billion**, while non-ETF funds had outflows of **-1.7 billion [7][38] - Total EM retail ETF flows reached 2.368billion∗∗,anotableincreasefrom∗∗2.368 billion**, a notable increase from **1.046 billion the previous week [52] Non-Resident Flows - Non-Resident EM Portfolio Flows: - EM local bonds faced net foreign selling, particularly in India with -332million∗∗[7]−EMequitiessawnetforeigninflows,mainlyintoTaiwanwith∗∗332 million** [7] - EM equities saw net foreign inflows, mainly into Taiwan with **362 million [7] Cumulative Trends - Cumulative Flows: - Cumulative flows for EM bonds and equities have shown a downward trend over the past year, with total EM flows at -$10.5 billion YTD [9] - The report indicates a recovery in fund flows compared to previous weeks, suggesting a potential shift in investor sentiment [9] Additional Important Insights - The report highlights the importance of monitoring high-frequency non-resident EM portfolio flows to gain a comprehensive understanding of market dynamics [70] - The analysis includes a detailed breakdown of fund flows by currency exposure, strategy focus, and regional performance, providing a nuanced view of the EM landscape [10][24][38] This summary encapsulates the critical insights from the J.P. Morgan Emerging Markets Research call, focusing on fund flows, regional performance, and market dynamics within the EM sector.