Emerging markets equity and bond funds’ longest inflow streak since 2013 tailed off in the second week of August on geopolitical tensions according to figures from data provider EPFR.
Investors pulled money from equity and bond funds in response to escalating tensions between the US and North Korea and fears in the US that stronger macroeconomic data would strengthen the hand of hawkish Federal Reserve policymakers.
By mid-august emerging markets equity funds tracked by EPFR posted their biggest outflow since the final week of 2016 as their 21-week run of inflows came to an end while emerging markets bond funds experienced net redemptions for the first time since late January.
Retail investors accounted for the bulk of the emerging markets equity fund outflows but were net contributors to emerging markets bond funds for the seventh straight week.
China equity funds saw the biggest outflows while Korea equity funds took in fresh money for the fourth consecutive week.
In the run-up to talks about the renegotiation of the North American Free Trade Agreement, Mexico equity funds posted their biggest weekly outflow since mid-April.
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