Gartman: Emerging Market Flows Will Go Straight to U.S.

The money that has poured out of emerging market funds is no cause for concern for financial markets, as it will be supportive for developed market equities, according to widely-followed investor Dennis Gartman.

Emerging markets have seen record outflows, according to new data from fund flow tracker EPFR Global, which showed that funds from the region this week were hit with the worst outflows since 2008.

But rather than holding that money in cash, investors will plough it into North America and Europe, where the political environment is more stable, the editor and publisher of The Gartman Letter told CNBC.

“I actually think if money moves from China, money moves out of emerging markets (EM), money will ask the question: ‘Where shall I go?’ and wise money will say to itself: ‘I am going to go where the yields are best, where the political circumstances are the least difficult to understand,” Gartman said.

“It doesn’t go from one area and goes to the sidelines…If it comes from EM and China, it will come to the U.S., it will come to Canada, it will come to Europe.”

Some $9.3 billion leaked from EM funds in the week to Thursday, EPFR said, with $7.1 billion exiting Chinese equity funds.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

Latest posts by Craig Erlam (see all)