It was somewhat surprising that February 2023 was in general a negative month for the European fund industry given the rather positive revisions of the economic outlooks for the major economies globally and a possible end of the interest hiking cycle of central banks. That said, mutual fund promoters (-€18.2 bn) faced outflows, while ETFs promoters (+€8.1 bn) enjoyed inflows. The outflows from actively managed funds were driven by outflows from money market products (-€18.8 bn). Within the current market environment, it is not surprising that European investors sold money market products since these products are considered as so-called safe-haven

Lipper data reveals robust flows into Emerging Market (EM) debt funds. In 2017, the asset class saw some U$50 billion of net inflows with total AUM increasing (in hard currency funds) by 46% since 2013. In this podcast, Penelope Foley, fund manager of the TCW Emerging Markets Income Fund and the TCW Emerging Markets Local Currency Income Fund explains why she has a reasonably sanguine outlook for the asset class in 2018. She discusses what is attracting investors to EM debt, the durability of supportive structural changes in EM markets, yield expectations and the potential consequences to this asset class by