As monetary tightening picks up pace, global investors are shunning emerging market (EM) assets. This is not surprising as the rate hiking cycles have punched a hole in performance of EMs. Besides, this time around, investors have to also deal with quantitative tightening.
This fear of investors is well captured in the Bloomberg Emerging Market Capital Flow Proxy Index. At 144 points, the index is below its long-term average of 146.
