Emerging market (EM) assets – currencies, debt, and stocks – all had a pretty terrible month in May.
Poor performance in emerging markets was so pronounced during the month of May alone that several Wall Street shops are now out with big calls declaring the “end of the bull market.”
However, despite the wave of negative sentiment that has hit emerging markets, macro hedge funds were in there buying up EM last month.
“Based on our exposure analysis, Macros bought EM exposure to the highest since October 2011, while maintaining their net long positions in [Europe, Australasia, and the Far East],” writes BofA Merrill Lynch analyst Stephen Suttmeier in the investment bank’s latest Hedge Fund Monitor report.
It looks like either the macro funds are taking a bath on their increased exposure to EM, or they see the latest movements in the market as a good buying opportunity.
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