Consolidation or Bigger Rally?
ET Now asked, “Give us a sense of where you are seeing us as well as global markets because we are seeing a bit of a cool off. Do you believe that this is just part of a consolidation before a larger rally? And give us your thesis of whether you expect rate cuts to come through just the way it was expected a couple of weeks back or has your view changed materially.”
Brandt responded, “So, my view has changed a little bit. I think that the US economy is quite resilient and there is a number of fairly good reasons for the Fed to pause. It is pretty finely balanced, but certainly the optimism of it for a December rate cut that we were seeing earlier in the quarter has faded for good reason.”
Fund Flows: Emerging Markets See Interest
When asked about current investment flows, Brandt said, “No, we are starting to see some flows into the big diversified global emerging markets funds, the GEM funds, but that does not seem to be coming really at the expense of US equity funds. Both US equity and bond funds have really had very consistent inflows week to week. They are not spectacular. But on the other hand, given the broad narrative of a rotation away from US assets, and we certainly saw a bit of that after Trump’s liberation day speech, but since then it sort of really settled down. Arguably some of the money that is coming to emerging markets funds may be coming from investors who have decided that the rotation to Europe may have been oversold and are looking for alternatives.”
India’s Role in Emerging Market Flows
Looking specifically at India, Brandt noted, “India gets a solid chunk of any money that goes into a gem ETF at the moment. But I have to say managers seem to be a little bit down on India without completely pulling away.”
The comments underscore that while the US market continues to draw steady investment, emerging markets, particularly India, are benefiting from selective inflows as investors seek diversification and potential growth opportunities.
