Net capital outflows from emerging markets currently correlate to those seen during the global financial crisis and are worse than the taper tantrum, a research report from Bank of America Merrill Lynch says, but don’t worry about it to the same degree. The market environment is now “much more benign” and looking at capital flows to help forecast future returns may no longer be appropriate. BAML: Recent emerging market fund outflow headlines don’t tell the whole story The report, titled “The Flow Puzzle,” says the strategy should be to focus on Fed policy, the plight of the U.S. dollar and…
BAML: Don't Judge Emerging Markets Based on Capital Outflows
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.