What Is The Fundamental Driver of Fund Flows Into Emerging Markets?

The transcript discusses the current state of market cycles, emphasizing the late cycle phase and the impact of yield curve inversion on future expectations. It highlights how markets are pricing in a recession more quickly than expected, particularly in emerging markets (EM). The discussion covers the growth differential favoring EM due to the US tax cut's one-time impact on corporate profitability. The transcript also addresses central bank tightening and its effects on the rate environment, especially in Asia. Finally, it examines the US's exceptional growth in 2018 and the normalization process favoring EM.

What is a key factor driving fund flow into emerging markets?

• Interest rates

• Currency stability

• Growth differential

• Inflation rates

How did the US corporate tax cut impact corporate profitability in 2018?

• It increased corporate profitability by 10%

• It increased corporate profitability by 25%

• It had no impact on corporate profitability

• It decreased corporate profitability

What is expected to happen to the growth differential in 2019?

• It will reverse completely

• It will remain the same

• It will narrow

• It will widen significantly

What is notable about central bank actions in 2019 compared to previous years?

• Central banks are maintaining the same policies

• Central banks are reducing interest rates

• There is more central bank tightening than since 2006

• There is less central bank tightening

What was one reason for the underperformance of emerging markets in 2018?

• Strong currency performance

• Lack of reliance on US corporate tax cuts

• High inflation rates

• Increased interest rates