Wealth Manager - Essential news for investment professionals

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

BofA: $15bn EM equity outflow to hit in coming weeks

BofA: $15bn EM equity outflow to hit in coming weeks

Emerging markets were last week hit with their biggest outflows since taper talk sparked a sell-off in markets last May.

It was a move that formed part of a broader shift out of risk assets. BofA Merrill Lynch Global Research reported that equity ETF funds last week suffered their largest outflow since July 2012, after investors withdrew $12.3 billion (£7.47 billion) in a stampede to safety.

Emerging market (EM) equity funds saw their largest outflows ($6.4 billion) since August 2011.

When combined, EM debt and equity funds outflows equalled $9.1 billion, while $2.7 billion was redeemed from EM debt funds, representing the highest level since June of last year.

The sell-off can be attributed to China’s disappointing growth figures, Argentina’s decision to devalue its currency, and the likelihood that the Federal Reserve could announce further reductions to its quantitative easing (QE) programme next week. 

Bank of America Merill Lynch analysts said a contrarian ‘buy’ signal could well be triggered by further EM equity outflows of $15 billion over next two to three weeks. 

The broad sell-off was not far from outflows witnessed during the US debt ceiling  in August 2011 and Lehman Brothers’ collapse in September 2008.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Play Tesco, Japan and the rise of the central banker

Tesco, Japan and the rise of the central banker

 Libby Ashby and leading wealth managers scrutinise the food retail sector, Japan’s consumption tax hike and political risk in the markets.

Your Business: Cover Star Club

Veteran banker boosts Sanlam’s stockbroking team

Veteran banker boosts Sanlam’s stockbroking team

A veteran private banker has been recruited by Sanlam Private Investments to strengthen its advisory stockbroking team.

Wealth Manager on Twitter