Monthly GEMs Equity Flows:This time it’s different澳门新濠天地
澳门新濠天地，None ，During the summer months (May to October), the inflow momentum intoEM equity funds is weak and the cash holdings of GEM fund managersare relatively high – history (data since 2001) suggests. For instance, theaverage inflow during the months between May and October is 0.06% ofAuM significantly lower compared with the average inflow of 0.34% of AuMduring the remaining months of the year. Further, the average cash level(as % of assets) during the summer months is 3.24% compared with the2.98% during the remaining of the year. However, so far this year, we havenot noticed this seasonality in flows and cash levels.
EM equities continued to deliver robust performance – up c24% in USDterms YTD compared with c13% return on DM equities. We remainconstructive on the outlook for the asset class. EM equities remain sizablyunder-owned in Global portfolios (see bottom RHS chart on page 12); aretrading at cheap valuations compared with DM and also on a cyclicallyadjusted PE basis compared to history. Earnings rebound in EM isunderway helped by a recovery in profit margins. Positive sentimentaround China, revival in commodity prices (evidenced in July) and theweakness in USD are all helping the EM equity performance.