Emerging market funds have suffered their biggest outflows since the financial crisis this week, as investors pull billions of dollars from Chinese equities.
In total, $9.3bn left EM funds in the week to Thursday, according to data from funds tracker EPFR, the most since 2008. Of that, $7.1bn came from Chinese equity funds, which had previously seen three weeks of robust inflows including a record $4.6bn in the last week of May Global EM funds saw $829m of withdrawals, while Latin America funds lost $442m.
Emerging markets have come under increasing pressure recently as the US dollar has strengthened — something that has often led to the underperformance of EM assets. In the past month, the Russian rouble has dropped 8.6 per cent against the dollar, the Colombian peso is down 5.9 per cent, and the Malaysian ringgit is off 3.2 per cent.