EMs bearing the brunt of current uncertainty: Cameron Brandt, EPFR Global

In an interview with ET Now, Cameron Brandt, Director of Research, EPFR Global, gives his views on the global markets. Excerpts:

ET Now: Could you tell us how inflows have moved for emerging markets?

Cameron Brandt: Emerging market equities certainly seem to be bearing the brunt of the current uncertainty. For the second week running, the funds we track have posted year to date highs when it comes to outflows and it seems that the risk appetite has not died, it has simply migrated into the fixed income space. We are still seeing strong inflows into most bonds fund classes, including emerging market bonds, but very little interest in the equity space, both developed and emerging. Few exceptions to that, two of the stronger developed markets, Germany and Canada, equity funds geared to them have been doing well. Japan had surprising strong inflows this past week. Among the emerging markets, tending to be the smaller ones that lagged behind earlier in the year, Thailand, Philippines, Vietnam are all attracting positive attention, but at fairly small level.

ET Now: What about the US equities because the economic data there as well is disappointing?

Cameron Brandt: Basically if we saw the first retail inflows into US equity funds since last July, which you can either take as a final vote of confidence, the recovery here has some traction or the institutional investors seem to feel you have got a really strong sell signal. So institutional investor redemptions actually cancelled out at the first week of retail inflows.