Hedge Funds Exit Emerging-Market Assets as Real Money Swoops In
- Real money 4-week FX inflows near highest level in 16 months
- Divergence with hedge fund flows widest in Latin America
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Short-term investors are escaping emerging markets ahead of a likely U.S. interest-rate hike this week amid concern a strengthening dollar will undermine credit quality in developing nations.
Meanwhile, longer-term investors have increased their exposure, pointing to equity and currency valuations that linger below their five-year averages and arguing developed nations from the U.S. to France carry greater political risks.