EM bond funds see largest weekly outflow in two years, JPMorgan report says

NEW YORK (Reuters) – Retail investors yanked $3.2 billion out of emerging market bonds this week, the largest outflow in 109 weeks, with hard currency funds shedding $2.9 billion, JPMorgan said on Friday.

ETF outflows accelerated to $1.1 billion while non-ETF outflows shot up to $2.2 billion, the bank said in its weekly flows report.

Emerging market assets were expected to come under pressure as some of U.S. President-elect Donald Trump’s announced policies could translate to a stronger dollar and a higher than anticipated neutral rate from the Federal Reserve.

Higher rates in developed markets attract cash that would otherwise be deployed in EMs.

In weekly non-resident flows to EM portfolios, local bonds saw outflows led by Hungary at $677 million and equities also saw net outflows, with $1.7 billion coming out of India.