Emerging markets attract $1.1 billion a day as sentiment shifts

Investors are pouring money into emerging market assets at a near-record pace as currency resilience and China’s reopening have helped reverse last year’s slide, the FT’s Jonathan Wheatley reports. Emerging equity and debt markets have attracted $1.1 billion a day in net new money this week, according to the Institute of International Finance.

Recent inflows are second only to the surge that followed the lifting of coronavirus lockdowns in late 2020 and early 2021. This strong inflow underscores the shift in sentiment on developing markets after a significant underperformance in 2022. 

Paul Greer, portfolio manager for EM debt at Fidelity International, said the rally was partly driven by investors returning to emerging-market assets after cutting exposure over much of the past decade. Regardless of whether outsized inflows hold, EMs appear to have weathered recent shocks remarkably well.

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