EM Flows Weekly Turning the tide_ EM bond funds see the largest inflow since early October

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 $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 -$3.0 billion [7] - EM Equity Flows: - EM equity funds saw inflows of $504 million, recovering from outflows of -$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 $449 million from $137 million, while local currency bond inflows accelerated to $90 million from -$214 million [7] - EM ex-China saw inflows of $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 -$30 million, while EMEA and Latin America funds had inflows of $215 million and $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 $2.2 billion, while non-ETF funds had outflows of -$1.7 billion [7][38] - Total EM retail ETF flows reached $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 -$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.