ETF Snapshot: EMD only fixed income asset class to record outflows

Outflows of €430m

In the week ending 2 March, emerging bonds recorded outflows for the first time in two weeks as investors expressed concerns about the impact of rising rates in the US.

According to data from TrackInsight, emerging bond ETFs saw outflows of €430m compared to inflows of €108m the week prior. The outflows come after new Federal Reserve Chairman Jerome Powell signalled the central bank could hike rates more than the three times this year anticipated, typically a negative indicator for emerging markets. With the Consumer Price Index (CPI) remaining unchanged over the last 12 months at 2.1%, outpacing consensus estimates of 1.9%, markets are now pricing in a 30% chance of four rate rises this year, almost triple the levels seen at the start of the month, ...