EM currency turmoil reflected in hedge fund performance and flows

Emerging market inflows may start to reverse as performance slows

Turmoil in emerging market currency markets is reflected in hedge fund performance figures. The latest data from eVestment shows a mixed reaction to the tightening of monetary policy by the US Federal Reserve, widely seen as the catalyst for recent foreign currency volatility that is almost a complete reversal of the effect of a few years ago when the Fed and others embarked on quantitative easing.

Flows into emerging market funds were at their most negative in July compared with a year before.