After Donald Trump won the US election, emerging market investors took fright. They withdrew tens of billions of dollars from investment funds concerned that the new President's policies would cause a wave of problems for the asset class.
Half a year later, investors have shrugged off concerns about a so-called Trump slump. They are moving back into emerging markets in an attempt to generate returns in the low-yield environment and exploit strong economic growth in countries from India to Colombia.
Emerging market funds registered their 10th straight week of inflows in the week ended May 24, the same week Moody’s downgraded the sovereign credit rating of China, the biggest country in the asset class. But emerging markets — which are home to 80 per cent of the world’s population — are not for the meek. Witness the carnage that occurred in 2008 when the MSCI emerging markets index, which includes more than 20 countries such as Russia, South Africa and the Czech Republic, lost more than half its value in one year.
在截至5月24日的那个星期，新兴市场基金录得连续第10周资金流入，即便穆迪(Moody's)在同一周下调了中国（该资产类别中最大的国家）的主权信用评级。但是，占世界人口80%的新兴市场不适合胆小者。2008年发生的那一轮崩盘就是例证。当时，涵盖俄罗斯、南非、捷克等逾20个国家的MSCI明晟新兴市场指数(MSCI Emerging Markets index)在一年内失去一半以上价值。
Emerging markets also haemorrhaged money in 2011, and again in 2013, 2014 and 2015, after investors withdrew from the asset class when the US Federal Reserve said it would wind down its bond-buying programme. This sell-off accelerated on the back of a fall in prices for oil and other commodities, which are important industries in many emerging markets.
Last year, however, investors gradually returned to emerging markets, leading to a turnround in performance and an 11.2 per cent gain in the MSCI emerging markets index.
More than $100bn has flowed into funds investing in emerging markets in the 12 months to the end of March as investors attempt to tap into demographic shifts ushering in much larger middle classes with money to spend. This compares with redemptions of $35bn the previous year, according to Morningstar, the data provider.