Foreign investors pull $26.3 bn out of emerging‑market stocks and bonds in September

Foreign investors withdrew $26.3 billion from emerging‑market stocks and bonds in September, marking the first outflow since June. The pull‑back was triggered by higher U.S. Treasury yields after the Federal Reserve adopted a hawkish stance on interest rates. Overseas funds also sold heavily in South Korea, causing a sharp fall in emerging‑market equity values there. In September, investors pulled $7 billion from emerging‑market fixed‑income assets, the first net outflow in that segment since March. Over the year, foreign money has poured $246 billion into emerging‑market bonds, while equities have seen cumulative net outflows of $113.9 billion. The combined $33.3 billion outflow from stocks, bonds and fixed‑income in September highlights the sensitivity of emerging markets to U.S. rate moves. Investors cited the rise in U.S. yields as the main reason for moving money out of emerging markets.

Context

These movements illustrate how quickly global capital reacts to changes in U.S. monetary policy, with higher yields pulling money away from riskier emerging‑market securities toward safer dollar‑denominated assets.