Will inflows from abroad pick up again soon?

Net inflows into global ETF and mutual funds in September were at their lowest level since March, when there was last an outflow. While this was due in part to a continued small outflow from funds that invest in bonds, foreign flows into funds that invest in equities also fell sharply. What’s more, data from stock exchanges in Emerging Asia highlight that net foreign purchases have continued to decline in October. Investors’ waning interest may be due to fears about the health of the global economy and renewed concerns about the prospects for US monetary policy. However, we think demand from overseas is likely to pick up before long as valuations are relatively attractive.