It is tempting to ascribe the recent underperformance of emerging market equities to the waning appetite of overseas investors. There may be some truth in this. However, the evidence from mutual fund flows at least suggests that US investors are still looking for better returns abroad. We think the underperformance of emerging market equities this time around has more to do with the onset of policy tightening in most of the major emerging economies. While this is weighing on local markets for now, we don’t expect the drag to last.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services