Displaying items by tag: EM

Emerging markets have faced a challenging year, but they remain essential for achieving greater portfolio diversification. According to insights from the Natixis 2025 Institutional Outlook Survey, many institutional investors anticipate robust growth in these markets next year, with monetary policy shifts expected to play a significant role in driving expansion. 

However, China’s economic struggles, including a weak real estate market and reduced consumer spending, have tempered enthusiasm, leading investors to focus on other opportunities. India is gaining traction as a standout emerging market, with many predicting it will surpass China as a top investment destination, while regions like Asia ex-China and Latin America are also drawing attention. 

Though uncertainties persist, adopting a long-term approach to investing in emerging markets can yield strong growth potential as global economic conditions evolve. This strategy allows investors to tap into the transformative opportunities these markets continue to offer.

Finsum: With high risk and growth opportunities, its important to caution clients on the risks and that term is baked into the picture. 

Leading up to the much-anticipated rate cut, global investors increased their equity fund purchases, anticipating a rate cut by the Federal Reserve that would kick off a broader cycle of reductions. A total of $5.21 billion was poured into equity funds, slightly below the $6.54 billion invested the previous week. 

The Fed’s 50-basis point rate cut spurred risk appetite, particularly in Asia and Europe, where equity funds attracted strong inflows. Meanwhile, U.S. equity fund sales declined to a four-week low. Sector funds, particularly in financials and tech, saw outflows for the third consecutive week, while bond funds maintained their appeal, continuing a 39-week streak of net inflows. 

Additionally, precious metal funds attracted investors for a sixth week, while energy funds faced a reversal with net sales of $129 million. The data reflects increased confidence in riskier assets and a shift away from money market funds, which saw outflows after six weeks of positive investments.

Finsum: There are still two more rate hikes on the forecast if investors want to take note of these trends in equity markets.