Investors flee emerging markets
Emerging markets saw net outflows of about $30bn last month, as investors took fright.

Investors are souring on emerging markets. The asset class saw net outflows of about $30bn last month, says Edward Glossop of Capital Economics – the biggest outflow since the turmoil of March. Their caution is understandable, says Yen Nee Lee on CNBC. From Brazil to India, emerging markets are host to some of the world’s worst coronavirus outbreaks.
Yet some markets remain in favour. Take China, South Korea and Taiwan, where exporters are cashing in on the “upswing in the tech cycle” and the virus remains under control, says Ben Powell of asset manager BlackRock. Investors’ growing pickiness is especially evident in debt markets, says Jonathan Wheatley in the Financial Times. Chinese government bonds attracted $89bn through the end of August; a ten-year bond at 3% per year evidently looks like a great deal to buyers. By contrast, the 7.3% yield on offer in Brazil has far fewer takers, with $9bn being pulled from Brazilian government bond markets this year.
Value hunters will find a “panoply of bargains” in emerging markets, with stocks trading at “less than half the average price-to-book ratio” of US peers and offering generous yields, says Craig Mellow in Barron’s. Yet the coming months are likely to be rocky. For those with the stomach to bet on a “catch-up run”, Brazil looks “the best candidate”. The market has plunged this year but solid fiscal support and tax reforms could yet spark a rally.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Trouble brews in B&M as bargain shops take a hit
Opinion Once a stock market darling, B&M's share price has slumped. What has gone wrong for bargain shops?
-
US and China reach a ceasefire in their trade war after talks in London
The US and China's trading relationship – the most important one in the global economy – is back on track. Will the truce last?
-
Infrastructure investing: a haven of stable growth amid market turmoil
From booming construction in emerging markets to digital and green transitions, the infrastructure sector offers security, returns and long-term opportunities
-
The costly myth of “sell in May”
Opinion May 2025's strong returns for US stocks have once again shown that putting too much weight on seasonal patterns will only make investors poorer, says Max King
-
Who’s driving Tesla?
As Elon Musk steps back from government with his eyes on the stars, investors ask if he’s still behind the wheel at his electric-car maker.
-
Investment opportunities in the world of Coca-Cola
There is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
-
Streaming services are the new magic money tree for investors – but for how long?
Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
-
'Pension funds shouldn't be pushed into private equity sector'
Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
-
A fund that looks past the short term in Asia
Growth should remain strong, but successful managers also need to focus on governance. Here's how to find active opportunities in Asian markets.
-
Greg Abel: Warren Buffett’s heir takes the throne
Greg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?