Cameron Brandt News

Cameron Brandt, Director of Research, EPFR Global, says it is now the turn of US equity funds to see something of a reversion to the mean. The free pass they got in the immediate aftermath of Donald Trump's election, if not revoked, is certainly being scrutinised. The past 10 days have not been terrible for emerging markets. There has been a pickup of flows into dedicated Europe and Japan equity funds. In India, valuations are starting to get to levels where people will be comfortable again and maybe even see an upside. The last time we spoke, there was only bad news for emerging markets like India. When do you think there will be only good news for emerging markets like India? Cameron Brandt: It is certainly not quite as gloomy for emerging markets as when we last talked. But the emerging markets that are doing best at the moment are the ones perceived as being geared to Europe. We have had a fairly bumpy period, but it is Europe that has been catching the attention and flows. That said, the reallocation away from emerging markets definitely seems to be slowing. It has not stopped, but there are certainly points of life in the general universe and it is now the turn of US equity funds to see something of a reversion to the mean.

Cameron Brandt of EPFR Global says there is a strong inclination to return to emerging markets. However, the current appeal of the United States, at least in the short term, is so compelling that it is challenging for investors to overlook it in favor of emerging market narratives. The aspects of these narratives that hold credibility have recently experienced significant price increases. This interest is particularly focused on the major emerging markets in Asia, including India, China, Korea, and Taiwan, where substantial capital has been directed. What is the sense that you are getting? Is the dollar going to peak out anytime soon? Cameron Brandt: My sense is certainly that it has further to go and as much as there is a consistent theme for mutual fund and ETF flows, it is towards US mandated equity and bond funds.

«Investors are kicking some of the themes that they felt were worth backing, especially in the wake of Donald Trump's victory in the presidential election,» says Cameron Brandt, EPFR Global How you are looking at the trajectory that we have seen play out on Wall Street and how you have read into the producer price index report that we have seen, what the expectation is now from the US Fed. Cameron Brandt: Well, what we have seen from a fund flow perspective is an enormous flood of money come in to US mandated funds since the beginning of November really eclipsing pretty much every other fund group that we track.

Cameron Brandt, Director of Research, EPFR Global, says China's equity market, in some senses, has been the only game in town for domestic investors. There has been eye-catching inflows since the second quarter of this year, which peaked at a record weekly total of $40 billion two weeks back. But last week, they had significant outflows, the biggest single weekly outflow of $4 billion since 2015. So, even in China, this spirit of “what have you done for me lately” seems to be the determinant for flows. I just want to touch upon what is going on in the US because it has been a fairly robust few days of trade. Do you think that investors are still mindful about stretch valuations, the US presidential elections, and the fact that there are geopolitical risks? Cameron Brandt: I do not think they have forgotten, but there is so much good stuff in the proverbial punch bowl at the moment that it is hard to resist. There are some fairly rosy assumptions about the trajectory of interest rates over here. Oil prices have come down, which makes driving cheaper for people here, always good for the mood. And neither of the presidential candidates are saying anything about fiscal discipline. So, there is an assumption that this sort of expansionary fiscal policy will continue into next year.

Cameron Brandt, EPFR Global, The issue for India, certainly from a fund perspective, has been that the global emerging markets funds, the big diversified funds, even as they have raised their average allocation to India to a new record high, have not been attracting much money, if at all. So that source of flows has really dried up or even gone into reverse for much of the past five, six months. The India dedicated funds on the other hand, never left.

BEIJING — International investors are putting more money into Chinese stocks, even as local investors have remained cautious on the mainland markets.