About this work
Jonathan Fortun examines why portfolio flows to emerging markets reversed in September. Flows fell to a net outflow of $26.3 bn from an $11.4 bn inflow in August, the first outflow since June, as a hawkish Fed pushed up U.S. real yields and the dollar. Equities drove the swing with $19.2 bn of outflows, mostly heavy foreign selling of Korean shares, while debt flows were negative at $7.0 bn once hard currency demand faded and credit spreads widened late in the month. The note concludes that Fed projections of further hikes, a BoJ at its highest rate since 1995 and tightening across advanced economies raise the bar for EM carry in the fourth quarter.
Cite this work
Jonathan Fortun (2026). IIF Capital Flows Tracker: October 2026. Institute of International Finance.