Investors Aren’t Giving Up on Emerging Markets Yet, BofA Says

Investors haven’t lost faith in emerging markets even as the conflict in the Middle East roils riskier assets, according to Bank of America Corp. strategists.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Investors haven’t lost faith in emerging markets even as the conflict in the Middle East roils riskier assets, according to Bank of America Corp. strategists.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Developing nations were enjoying “the peak of investor optimism” before the outbreak of the Iran war, with record flows into equity markets across Eastern Europe, the Middle East and Africa despite rising tensions, strategists including John Morris wrote in a note.That created a “large base” for unwinding positions in the event of a protracted conflict, as higher energy prices threaten the global economy, the strategists wrote. But all depends on how long the war lasts. A quick resolution could reaffirm the optimistic view of emerging markets, Morris and his colleagues wrote. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.“Investors do not appear to be willing to give up on their positive structural view, at least so far,” they added.Before the war, top money managers had been building long positions across Asia, Latin America and parts of Europe, the Middle East and Africa, betting on robust growth, easing inflation and looser global monetary policy. Now, the prospect of persistently higher energy costs and a stronger dollar risk triggering a rush to cut exposure. The benchmark EM stock index slumped 8.6% in the first three days of this week before partly rebounding on Thursday. Inflows into EMEA equity markets hit a record $5.57 billion for the month through Feb. 25, the BofA strategists wrote, citing EPFR data. South Africa received the most inflows with $1.58 billion, followed by Poland with $787 million. The data does not capture the outbreak of the Iran war three days later.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.365 Bloor Street East, Toronto, Ontario, M4W 3L4© 2026 Financial Post, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.You can manage saved articles in your account.and save up to 100 articles!You can manage your saved articles in your account and clicking the X located at the bottom right of the article.