Global emerging market (GEM) funds have seen outflows for 5 straight weeks and the outflow figure last week was $2.2 billion.
How much has the total outflow been this year and where is the money going?
After a dream 2017 for emerging markets, there is a bit of reality check in terms of massive outflows for the EM equity funds in the last five weeks.
The global emerging market equity funds have seen an outflow of $2.2 billion in the last week, which shows money is moving out of EMs and the large portion of the funds are moving back to the mother market that is US.
Within the global emerging markets (GEM), ETFs is the biggest source of outflows in the last 5-6 weeks.
However, what is supporting the India market on the downside are basically the domestic flows but the upside from FII perspective looks capped for the near-term.
FIIs have sold $530 million in cash or equities and $5.2 billion in bonds in 2018.
All this shows that money is clearly moving out of EM equities on back of concerns of trade wars, China hitting back. The other risk especially for India is MSCI China A share inclusion which will lead to further selling in the month of August.