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Credicorp Capital Shuffles Its Portfolio of Favorite Latin American Bonds

Credicorp and Latin American bonds — Pixabay CC0 Public Domain

With the returns already in hand and aiming for new opportunities, Credicorp Capital has made changes to its Top Picks portfolio of Latin American fixed income. According to a report, three investment-grade bonds and three speculative-grade securities were replaced in the portfolio.

Investment-Grade Bonds

In the investment-grade segment, the firm removed the JBS 2053 bond, “after strong performance,” replacing it with the IFHBH 29 bond from the Peruvian conglomerate Intercorp. “We expect IFH to be supported by the gradual recovery of its subsidiaries and its recent outlook revision, consolidating its IG status,” the firm noted in the report.

For the mining portion, Credicorp replaced the Southern Copper 2035 bond with debt from Brazil’s Nexa Resources 2034.

“Southern is a strong credit but with little room for spread compression,” they explained, adding, “We do not foresee a short-term positive catalyst, as uncertainty persists around mining reforms in Mexico and the social approval of the Tia Maria project.” On the other hand, Nexa’s bond attracted attention “due to its attractive yield compared to peers and manageable risks, supported by a clear path of operational and financial improvements.”

Lastly, Credicorp Capital decided to swap the Suzano 2029 bond from the Brazilian pulp giant for the company’s 2047 bond. This bond, they noted, “offers better risk-adjusted yields relative to the BBB- curve.” They further highlighted their confidence in Suzano as it “enters the harvest phase of its Cerrado project.”

High-Yield Bonds

On the speculative-grade side, the financial firm decided to remove the 2032 bond of Chilean retailer Falabella. This decision, they explained, was due to the bond achieving its spread target relative to the Cencosud 2031 bond at approximately 50 basis points.

In its place, Credicorp added the 2028 bond of Peruvian company InRetail Consumer. “We believe the bond offers a good yield relative to Cencosud’s,” they explained.

Another change involved swapping the Minsur 2031 bond with the MRFGBZ 31 bond from Brazilian protein producer Marfrig Global Foods. This decision was based on the fact that the former “is trading relatively tight compared to BBB-rated names, considering its split rating limits flows despite its IG credit metrics.”

Additionally, they closed their overweight position in the Hunt Oil 2033 bond, “as its spread differential with the PLUSCM 36 has compressed to ~65 bps compared to the six-month average of ~75 bps.” For this reason, they decided to replace it with the BINTPE 30 bond from the Peruvian financial institution Interbank. “It again appears attractive compared to the BCP 30, offering an interesting yield for a relatively short duration to call,” they noted.

New Platforms, Altcoins, and Legislation Will Drive the Growth of Crypto Assets in 2025

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Crypto growth in 2025 — Pixabay CC0 Public Domain

2024 was a year of transition for the cryptocurrency universe. According to Hashdex, this market went through a recovery cycle following a turbulent 2022 marked by bad actors and fraudulent activities. Reflecting on the past year, they believe crypto assets experienced a recovery phase and the beginning of a bull market. A key turning point was the U.S. election results and Donald Trump’s victory. Evidence of this is the Nasdaq Crypto Index, which has risen more than 57% since November 5, 2024, driven by widespread optimism about the future direction of U.S. digital asset policies.

“We believe the current investment case for bitcoin and other crypto assets remains strong. The steady demand from institutional investors, advancements in infrastructure, and a regulatory environment set to improve significantly in 2025 are positioning this asset class for what could be its strongest year on record,” said Samir Kerbage, CIO of Hashdex. In his opinion, crypto assets tend to follow a cycle of four years that includes a bullish phase lasting approximately 12 months, followed by a bear market lasting one year, and then a recovery period spanning two years. In the last two bull markets, altcoins (that is, everything except bitcoin) have significantly outperformed the largest crypto asset, according to Hashdex.

“I believe we have entered a bull market, reinforced by the macroeconomic environment and the U.S. election results. But another indicator of a bull market is the superior performance of the Nasdaq Crypto Index compared to bitcoin. Over the past three months, the index has outperformed bitcoin (78% vs. 76.5%) and, since the elections, the Nasdaq Crypto Index has outpaced bitcoin by 6.8%,” added Kerbage.

2024 was a year of transition for the cryptocurrency universe. According to Hashdex, this market went through a recovery cycle following a turbulent 2022 marked by bad actors and fraudulent activities. Reflecting on the past year, they believe crypto assets experienced a recovery phase and the beginning of a bull market. A key turning point was the U.S. election results and Donald Trump’s victory. Evidence of this is the Nasdaq Crypto Index, which has risen more than 57% since November 5, 2024, driven by widespread optimism about the future direction of U.S. digital asset policies.

A key area, according to the entity, is smart contract projects—platforms that will enable users to conduct transactions involving not only information but also value and ownership. Hashdex estimates that these platforms and applications will outperform bitcoin over the next 12 to 18 months, as they compete for users and lay the foundation for decentralized applications.

“Thanks to the infrastructure developments we have seen in this area in recent years, new applications are emerging in fields such as artificial intelligence, video games, and many others as tokenization continues to expand. We also believe that new regulatory advances in 2025 will be more beneficial to these applications than to bitcoin specifically, given that bitcoin already has regulatory clarity and a well-developed capital market structure, with the growth of ETFs, options, and futures,” Kerbage explained.

In the U.S. and Europe, this legislative and regulatory clarity benefiting altcoins may include market structure legislation, as proposals like FIT21 aim to eliminate ambiguities regarding crypto assets’ status as commodities or securities, while creating registration pathways that could drive adoption in the U.S.

According to the latest report from Sygnum, a global banking group specializing in digital assets, relatively small institutional investor inflows into bitcoin ETFs could have a disproportionate impact on the market due to limited liquid supply. Their analysis of recent ETF flows suggests that every $1 billion inflow (approximately 0.1% of Bitcoin’s market cap) corresponds to price movements of 3-6%, with larger inflows showing greater price sensitivity.

The report predicts that this multiplier effect could be amplified if major institutional investors—including sovereign wealth funds, endowments, and pension funds—begin making allocations. Some U.S. state pension funds have already invested in crypto assets, and several states have introduced bills encouraging pension funds to consider cryptocurrency allocations. With the size of assets managed by these investors, even conservative estimates represent a larger wave of inflows than experienced in 2024 with the launch of spot cryptocurrency ETFs in the U.S.

“Many traditional institutional investors, those with the largest volumes of assets under management, are just beginning their foray into cryptocurrencies. Our analysis shows how even relatively modest allocations from this segment could fundamentally alter the crypto asset ecosystem. With greater regulatory clarity in the U.S. and the potential for Bitcoin to be recognized as a reserve asset for central banks, 2025 could mark a significant acceleration in institutional participation in crypto assets,” said Martin Burgherr, Chief Clients Officer of Sygnum Bank.

Stablecoin legislation, particularly the implementation of MiCA, will also play an important role by driving stablecoin adoption in the U.S. and Europe, expanding their use beyond emerging markets.

The repeal of SAB121, allowing U.S. banks to hold cryptocurrencies for their clients, is expected to enable banks and brokerages to expand their cryptocurrency trading and custody offerings, benefiting altcoins in particular. Additionally, new ETF launches under the new SEC chair are raising hopes for more approvals, including ETFs for indices and individual assets like Solana and XRP. Although uncertainty persists, the availability of new assets with ETFs as access points is highly positive.

Altcoin Use Cases

According to Kerbage, in addition to bitcoin evolving as an emerging digital store of value and smart contract platforms becoming a new way to exchange information, value, and ownership, three other altcoin use cases are expected to benefit over the next year:

DeFi: Projects aimed at creating an internet-based financial system, operating on smart contract platforms, will establish a new global capital markets infrastructure for payments. Stablecoins and tokenized money market funds are the first major use cases.
Web3: A new iteration of the internet that will enable users to own their data and make the web decentralized and more useful for innovations like AI agents and other advancements.
Digital Culture: An emerging digitally native generation will drive greater demand for owning digital assets and collectibles, with video games as the first natural application.

“If we compare cryptocurrencies to the internet, this industry is like the internet in the 1990s, and bitcoin could be compared to email—the only application most people have heard of. However, if we fast-forward 20 years, although email remains very useful, it has not been the internet application that has created the most value for society. We believe this perspective could apply to how bitcoin is currently perceived in relation to cryptocurrencies,” Kerbage concluded.

Venture Capital, Growth Equity, and Private Debt: Venturance’s Plans for 2025

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(cedida) Antonio Zegers, gerente general de Venturance Alternative Assets — Photo courtesy

2024 marks 15 years since Antonio Zegers, Santiago Valdés, and Roberto Loehnert created Venturance Alternative Assets, an asset manager specializing in alternatives that has carved out its space in the Chilean financial ecosystem. Looking ahead, the plan is to leverage the experience their investments have brought them to launch new strategies in venture capital and growth equity, in addition to taking advantage of opportunities from the boom in private debt.

“As a management company, we are advancing in all areas,” describes Zegers, general manager of the investment firm – which has around 350 million dollars in AUM – in an interview with Funds Society. In particular, the areas of greatest interest to the firm are private equity and private debt, with new launches in mind, supported by the good results of two exits made in 2024.

In venture capital – one of Venturance’s flagship areas – they have two funds in operation: FIP Alerce, a private vehicle in the investment process, and Zentynel I, a fund focused on biotechnology and domiciled in the U.S. About this last vehicle in particular, Zegers highlights that “it has advanced very quickly in its placement and is a niche where we have adapted quite well.”

For its part, in growth equity, they have four strategies, according to their online portal. Two are private investment funds (FIP): Endurance I and Venture Equity, and two public funds: Outdoors and SAAS HR. In this area, the firm’s strategy is to take medium-sized companies, in the growth stage, and make them “as professionalized as possible,” describes the CEO of the asset manager.

New Launches

“In 2025, we are going to launch the second Zentynel fund, to continue that strategy,” Zegers anticipates, expecting it to be around 30 million dollars.

Regarding the portfolio, the executive notes that “like any venture capital fund,” the vehicle will be “well atomized,” with around 15 investments in the portfolio. The portfolio’s objective is biotechnology companies and related businesses, such as medical devices.

On the other hand, the firm is preparing to launch its third public growth equity fund. In this asset class, the objective is to strengthen the operation of the companies so that a strategic buyer is willing to pay for that added value and that the companies can move to a new stage of expansion.

“We have a group of base contributors who want to continue doing things with us,” says Zegers, adding that the new fund will replicate the strategy of the previous two iterations. Thus, they will focus on a profile of medium-sized companies, with revenues between 10 million and 50 million dollars, and expect the portfolio to have more than eight assets.

“We have already liquidated four assets, and the idea is to capitalize on our specialization in that area, for the next fund,” he notes. In May 2024, they sold the hamburger chain Streat Burger to the business group Copec, and in September, the mining equipment supplier Ancor Tecmin to the Canadian firm EPCM Group.

Opportunities in Private Debt

Outside of their private equity formulas, private debt – one of the most visible categories in the boom of alternatives in the Chilean fund industry – is a space they are watching closely. “It is the subclass of alternative assets that has been attracting the most attention lately,” says Zegers.

The area manages over 100 million dollars in strategies in dollars, Chilean pesos, and UF (a unit of account indexed to inflation). The hard currency fund, notes the CEO of the asset manager, has seen significant placement.

More recently, the professional also emphasizes that “what is capturing more attention lately is the UF fund,” as the drop in rates has left investors looking for inflation-indexed instruments.

For now, according to their website, the company has three funds: Lennox, which invests in working capital for an exporter, in dollars; FIP Fitz Roy/FI Tronador Deuda Privada, which finances Chilean SMEs via promissory notes with collateral; and FIP Navarino, which invests in short-term debt from a factoring, focused on invoices, leaseback, and loans.

What Lies Ahead

Looking further ahead, Zegers says that at Venturance Alternative Assets, they have “no specific bias.” The key, he explains, is to “stay very attentive” to take advantage of the opportunities offered by the markets in which they participate.

“There are subsectors that are gaining more prominence, such as UF instruments or biotechnology,” but it’s not something they predetermine.

For now, they plan to focus on their business lines: venture capital, growth equity, private debt, and real estate assets, where they manage six development funds.

However, new areas of interest are emerging. “Green infrastructure is a topic we have identified and want to reach, not as a fund directly, but as underlying assets,” he comments, as opportunities for their growth equity strategies. In addition, he notes there are some interesting spaces to explore, such as the world of energy storage.

Regarding more traditional infrastructure, they see less motivation. “We haven’t looked into it. It’s a topic, in our opinion, of greater specialization and size,” says the CEO, adding that while there are local players in that market, “the field is more dominated by foreign infrastructure funds.”

The Chilean Fintech Fraccional Goes International with a Project in Miami

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(cedida) Fundadores de Fraccional.cl (de izq a der): Julián Blas, COO; Tomás Charles, CEO; y Patricio López, CTO — Photo courtesy

The fintech Fraccional (Fraccional.cl) has taken a step forward in the internationalization of its model, which is based on fractional real estate investment, expanding beyond the borders of Chile. This milestone involves a project in Miami, United States, a market they describe as highly profitable and dynamic.

According to Julián Blas, COO and co-founder of the company, in a press release, this initiative responds to demand for assets in the U.S. market—characterized by its stability and dollar-based denomination—from its users.

Fraccional’s model is anchored in crowdfunding to invest in real estate projects, significantly lowering the entry barrier for this type of asset. For the Miami project—a market historically reserved for high-net-worth individuals—investors can participate with as little as $300.

The system brings together individuals interested in investing in the fintech’s residential real estate development projects. Investors purchase shares through a joint-stock company, becoming partners. From there, in addition to property appreciation, contributors receive rental income from the properties.

A Market of Interest

The first development of the Miami project targets the upper-middle class and will be located in the northern part of the city. It replicates Fraccional.cl’s traditional model, where investors acquire fractions of real estate projects. “We maintain our essence: simple and accessible investment but with a global perspective,” Blas stated in the press release.

For its entry into the U.S. market, Fraccional will work with experienced real estate companies that meet strict requirements, such as having approved building permits. “We have chosen partners with whom we already have experience in Chile, such as Copahue and GFU, linked to successful developments in Ñuñoa, for instance,” Blas detailed.

The fintech emphasizes that Miami has shown sustained growth in housing demand, describing it as a high-appreciation market.

In 2023 alone, the city received over 54,000 migrants, contributing to a market with high turnover and projects that typically sell within one to two months. This dynamism has established Miami as a preferred destination for international investors, including Chileans, the company stated.

Plans for Expansion

The initial Miami project will be followed by a second initiative, focusing on the lower-middle class and located in the southern part of the city.

Looking further ahead, the fintech is also exploring opportunities beyond the U.S. market. It has its sights set on Latin America and Europe, particularly Spain, where it plans to launch coastal projects for residential and vacation purposes.

“With this strategic move, Fraccional.cl aims to establish itself as a key player in the fractional real estate investment market, offering attractive and accessible alternatives for small Chilean investors interested in dollarizing their assets and diversifying risks,” the press release concluded.

The Transition Period in North America Is an Opportunity to Invest

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(Wikpedia) Donald Trump, Claudia Sheinbaum — Wikimedia Commons

North America is undergoing a period of political and economic transition that may generate investment opportunities, especially in the markets of Mexico and the United States, despite the challenges. This is outlined in the Mexico 2025 Strategy report, prepared by the research team at Grupo Bursátil Mexicano (GBM) Casa de Bolsa.

The Latin American country recently experienced a change in government just over two months ago, with its first woman president in history, Claudia Sheinbaum Pardo. Meanwhile, in the United States, Donald Trump will take office for a second term on January 20, following a decisive victory in the election on November 5, 2024.

GBM highlights that a selection of Mexican companies reflects some of their most attractive valuations in decades, driven by a changing social and political landscape across the region. The brokerage firm supports increased portfolio exposure to defensive names, particularly in resilient sectors in such contexts, such as consumer goods and infrastructure.

The specialists behind the report identified three factors that could benefit Mexican equities next year:

Strong domestic consumption dynamics:
Mexico maintains robust internal consumption dynamics, supported by social programs and a rising wage base in recent years. Additionally, the purchasing power of remittances has regained momentum after the dollar strengthened against the peso in the second half of 2024.
Strategic location in North America and a robust manufacturing sector:
The region continues along a path of supply chain integration, facilitated by Mexican corporations with leadership positions not only nationally but also in the United States. GBM also identified investment commitments in the infrastructure sector for the 2020-2029 period that are 43.3% higher in real terms than the previous decade, strengthening the country’s medium- and long-term outlook.
Potential for growth in infrastructure and housing:
With the potential consolidation of nearshoring, the country may be at the beginning of a period of infrastructure growth. Additionally, the positive economic impact of this trend could increase the population’s purchasing power, triggering significant demand for housing.

The GBM analysts further note that the effect of nearshoring could boost exports and foreign direct investment even more, leading to significant economic benefits in the logistics and energy sectors.

Other analysts from investment firms have emphasized in their year-end reports that they continue to favor U.S. equities, at least in the early phase of Trump’s second term.

Franz Berdugo Joins JP Morgan in Miami

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J.P. Morgan has added Franz Berdugo to its Miami office, coming from Bci, according to a post by the private banker on his LinkedIn account.

Berdugo, with over 10 years of experience in the Florida city’s financial industry, will serve as Vice President after working throughout 2024 at Bci.

Before joining the Chilean bank, he worked at Safra from February 2023 to May 2024, where he held roles in portfolio management.

Additionally, Berdugo spent nearly six years in the portfolio management division at Morgan Stanley, also in Miami, from May 2017 to November 2022.

Earlier in his career, he worked as a Relationship Manager at Citi for three years.

Berdugo holds a Bachelor’s degree in Business Administration from Florida University and is certified with FINRA Series 7 and 66 licenses.

U.S. Consumer Confidence Declines in December

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Increase in RIA consolidations industry dynamics — Image Developed Using AI

The U.S. Consumer Confidence Index by The Conference Board dropped 8.1 points in December, reaching 104.7, marking a decline compared to November, when Donald Trump won the elections.

Additionally, the Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell 1.2 points to 140.2, according to the report.

“While weaker consumer assessments of the present situation and expectations contributed to the decline, the expectations component experienced the most significant drop. Consumers’ views on current labor market conditions continued to improve, consistent with recent employment and unemployment data, but their assessment of business conditions weakened,” stated Dana M. Peterson, Chief Economist at The Conference Board.

On the other hand, the Expectations Index, which reflects consumers’ short-term outlook on income, business activity, and labor market conditions, fell 12.6 points to 81.1, just above the threshold of 80, which often signals a recession.

Compared to November, consumers in December were substantially less optimistic about business conditions and future income. Additionally, pessimism returned regarding future employment prospects after cautious optimism prevailed in October and November, Peterson added.

Adult Consumers Are the Most Pessimistic

Among age groups, the decline in confidence in December was led by consumers over 35 years old, while those younger than that range were more confident.

Among income groups, the drop was concentrated among consumers with household incomes between $25,000 and $100,000, while those in the lower and upper income brackets showed only limited changes in confidence. On a six-month moving average, consumers under 35 years old and those earning more than $100,000 remain the most confident.

In December, consumers were slightly less optimistic about the stock market: 52.9% expected stock prices to rise in the coming year, compared to 57.2% in November.

Similarly, 25% of consumers anticipated stock prices would fall, up from 21.7%. The proportion of consumers expecting higher interest rates over the next 12 months rose to 48.5%, but remained near recent lows.

The percentage of those expecting lower rates dropped to 29.3%, down from recent months but still relatively high, Peterson noted.

Michael Rubenstein Joins UBS Private Wealth Management in Florida

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The responsibilities of Rubenstein, who will be based in Naples, Florida, will include business development, relationship management, trust and estate planning, financial planning, and investment management, according to the statement accessed by Funds Society.

“With offices in Naples, Short Hills (New Jersey), and New York, The Matina Group has been advising clients in Naples and across the United States for more than two decades,” adds the information from UBS.

The multigenerational team of thirteen members focuses on providing clients with boutique-level services “through thoughtful advice, customized solutions, and a first-class client experience.”

Rubenstein previously worked as a senior trust advisor and brings more than 15 years of experience in the legal and wealth management sectors. He is licensed to practice law in both Florida and New Jersey.

“We are incredibly proud to welcome Michael to our exceptional team, The Matina Group at UBS,” said Joe Matina, Managing Director and Private Wealth Advisor at UBS.

Born in Southwest Florida in 1989, Rubenstein earned a Bachelor of Science degree from Vanderbilt University, a Juris Doctor, and a Master of Business Administration (MBA) with specializations in Tax Law, Trusts and Estates Law, and Finance from the University of Miami.

He also holds a Master of Laws in Taxation from Villanova University.

After working in Palm Beach for five years, he returned west with his family in 2017, where he worked for Akerman LLP as an attorney specializing in tax law, wills, trusts, and estates.

Currently, he serves on the board of the Jewish Federation of Greater Naples and the Starability Foundation. He has also been a board member of the Naples Therapeutic Riding Center, the Golisano Children’s Museum of Naples, and Ronald McDonald House Charities of Southwest Florida.

Artificial Intelligence and Uranium ETFs: Investor Preferences in 2024

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AI and uranium ETFs — Photo courtesyRahul Bhushan, Managing Director in Europe at ARK Invest

Each month, Rahul Bhushan, Managing Director in Europe at ARK Invest, shares the standout data from the European thematic ETF market: key trends, changes in investor flows, and more. In his year-end 2024 edition, he chose to analyze November’s investment flows, uncovering several highly relevant insights.

The expert highlights three key areas of inflows:

1.- Artificial intelligence ETFs recorded inflows of $172 million in November, “highlighting investor enthusiasm as the AI boom shifts from hardware-driven infrastructure development to software applications that unlock real productivity gains,” says Bhushan.

2.- Uranium ETFs attracted $90 million, reflecting the anticipated growth of alternative energy sources. “Donald Trump’s reelection as U.S. president signals a return to pragmatic energy policies that position nuclear energy as a cornerstone of resilience and efficiency,” Bhushan explains.

3.- Infrastructure ETFs led inflows with $81 million in November, underscoring strong investor interest in domestic infrastructure. “Infrastructure stocks tend to perform well in election years and are bolstered by Trump’s plans to rebuild and reindustrialize America, signaling sustained growth in this sector,” the expert adds.

Bhushan also noted trends in the thematic ETFs that underperformed during the month:

1.- Clean energy ETFs recorded the largest outflows, with $152 million in redemptions. Investor appetite appears to be shifting beyond the capital-intensive renewable energy generation supply chain. “Instead, attention is increasingly focused on more profitable areas of the value chain, such as energy efficiency solutions and software-based grid infrastructure, where companies are better positioned to deliver short-term returns,” he notes.

2.- Cybersecurity ETFs saw outflows of $75 million, as investors took profits after a strong performance period. However, as cyber threats grow more sophisticated and AI transforms security environments, Bhushan explains that the need for robust digital defenses continues to drive long-term opportunities in the sector.

3.- China ETFs experienced redemptions of $64 million, “highlighting persistent investor concerns about geopolitical tensions and a shift toward more predictable growth opportunities in Western markets.”

Longer-Term Observations

The available data, covering nearly the entire year with only one month remaining, is sufficient to draw conclusions about investor preferences in 2024.

Among the highlights of the year are:

1.- Artificial intelligence ETFs, which have led investment inflows with $1.78 billion. AI continues to capture investor attention as a transformative force, with significant advancements and applications across all sectors bolstering confidence in this theme.

2.- Smart grid ETFs, with investment flows totaling $405 million, “highlighting the demand for infrastructure supporting energy efficiency and modernization of the power supply,” according to Bhushan, who adds that as digital infrastructure expands, “smart grids will be critical for managing energy effectively.”

3.- Uranium ETFs, which have accumulated $250 million in subscriptions, reflecting growing interest in nuclear energy within the broader energy transition. “Investors see nuclear energy as a reliable and scalable energy source for decarbonizing the energy mix.”

Key trends among the most lagging ETFs included:

1.- Robotics and automation ETFs have experienced the largest outflows, with a total of $996 million. As investors focus more on AI, interest in broader areas like pure industrial automation may be waning amid a shift in thematic preferences.

2.- Clean energy ETFs have recorded outflows of $834 million. This narrower focus within the energy transition theme appears to have seen cautious positioning, according to the expert, “especially ahead of the U.S. elections and potential regulatory changes.”

3.- Electric vehicle and battery technology ETFs have seen redemptions of $761 million, “likely reflecting caution in the lead-up to the U.S. elections.”

The Trump Effect on Emerging Markets: Flows Exit Equities and Enter Debt

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In early November 2024, under the watchful eyes of global markets, the U.S. electorate chose Donald Trump as its next president. Emerging markets were not immune to the effects of the “Trump trade” on international exchanges. The region saw positive net inflows overall, but with outflows in equities.

Figures from the Institute of International Finance (IIF) show that non-resident portfolio flows to emerging markets reached a net $19.2 billion in November. This result, they added, was marked by a strong divergence between fixed income and equities.

Emerging market debt markets attracted $30.4 billion net, “highlighting the persistent search for yield amid global uncertainties,” according to the entity’s economist, Jonathan Fortun. In contrast, equities saw net outflows of $11.1 billion, “underscoring the fragility of investor confidence in the face of evolving political and economic landscapes.”

According to Fortun, the U.S. elections—which resulted in the Republican Donald Trump becoming the next president—and their effects have cast “a long shadow” over global markets, deeply influencing the dynamics of flows into emerging markets.

“While October saw increasing uncertainty surrounding the election itself, November’s flows were shaped by market reactions to the election outcome and the implications of the new administration,” Fortun noted.

Latin America and China

Breaking down the international portfolio flows, IIF figures show a preference for Latin America in the penultimate month of the year. The region, according to the report, attracted the largest net capital inflow, totaling $6.5 billion.

This was followed by Emerging Europe with $4.8 billion net, and Emerging Asia with $4.6 billion. The most modest inflow in the category was recorded in Africa and the Middle East, which saw a net inflow of $3.4 billion.

Echoing the geopolitical concerns surrounding the Trump era, China was particularly impacted that month.

Chinese equities extended their downward trajectory, registering an outflow of $5.8 billion, continuing the trend observed in October, according to the IIF. “This sustained pessimism around Chinese equities is anchored in a confluence of factors, including regulatory concerns, a slowdown in economic growth, and persistent geopolitical tensions,” Fortun explained in the report.

In contrast to the $37.3 billion that flowed into emerging markets excluding China, the debt markets of the Asian giant saw net outflows of $7.5 billion.

That said, capital outflows from Chinese equities were not the sole source of negative flows in emerging markets. Excluding that market, outflows still amounted to $5.3 billion.