• In early July, Treasury Secretary Yellen made a trip to Beijing in an attempt to repair ties between the U.S. and China, as geopolitical tensions between the two countries are at their highest in decades. During Yellen’s visit, she singled out China’s treatment of foreign companies, noting she’s been “troubled by punitive actions that have been taken against U.S. firms in recent months.”
• Investors have responded to this uncertainty and overall tensions in the Chinese market in recent years. Emerging Markets ex-China funds have experienced net inflows of $900 million or more annually in recent years, excluding the COVID-19 shock. 2023 is no different with $1.2 billion in net inflows through May.
• Fund launches also reveal an increase in demand, with 10 launches in 2022 and 9 launches in 2023. This reflects a fairly large increase with the past 10 years averaging 5 fund launches per year.

Emerging Markets ex. China: AUM & Net Flows, 2019 – May 2023 ($B)