Dollar has further to go; US too appealing for investors to look at EMs for now: Cameron Brandt
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.
But I would qualify almost anything I say today by the fact that this is an unusually fluid period certainly in terms of sentiment and planning ahead. Everyone is talking about the impending arrival of Donald Trump in the White House for a second term. But we are also a week away from the big two-week Lunar New Year holiday in China when that country's economy tends to go a bit dark as everyone travels.
You are getting a growing number of fourth quarter earnings reports, both here and also in India – and you are making a hard decision on all of the variables, – I think people are taking a step back. What we have seen actually is that the stronger themes of last year are all taking a bit of a
