Investors are making more cross-border money moves
The flow of money moving across borders is rebounding from a record low as investors prepare for interest-rate cuts globally, according to the world’s largest custodian bank.
US and European investors are deploying more cash into fixed-income and equity markets outside their home region, according to data from Bank of New York Mellon Corp., which has a view on nearly $50 trillion of assets.
It’s a sea change from last year, when the prospect of ever higher rates and the risk of recession left investors cautious and anchored at home. But with inflation and economic troubles cooling across the world and risk appetite increasing, they are keen to deploy cash elsewhere, said Jason Vitale, head of global markets trading at BNY Mellon.
“We are now seeing active investors shift back into public markets, with flows recovering into both developed and emerging markets,” Vitale said in an interview. US investors represent around 60% of BNY Mellon’s custody accounts, with the rest spread across Europe and the UK.
Last year US money market funds ballooned to a record as the Federal Reserve raised rates aggressively and investors flocked to safety. Meanwhile, the bias to own US equities, amid hype around artificial intelligence, meant it was the worst 12 months for cross-border flows since BNY started recording data in 2013.
While the S&P 500 Index has continued upward to hit a fresh record in January, in recent months emerging market stocks have also recovered on the prospect of Fed cuts, and they’ve rebounded again this month on China’s stimulus measures.
Developing nation stocks had a record $12.1 billion of inflows in the week through Jan. 24, according to Bank of America Corp., citing EPFR data. Chinese funds had the largest
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