These 2 Incredible AUM Charts Show What's At Stake With QT1
Callum Thomas | Sep 24, 2017 12:23AM ET
The Fed's plan to normalize its balance sheet will begin to be put in place from next month. This is passive QT or Quantitative Tightening - call it QT1 if you want... the opposite of quantitative easing. I outlined their decision to emerging markets had been a key beneficiary of US quantitative easing, so now that the Fed is tightening, the incredible near-vertical movement in emerging market equity ETF assets under management is going to come under increasing scrutiny. It may take some time before QT puts the squeeze on emerging markets, but either way, the rapid rise in EM assets shows extreme optimism and FOMO.
The search for yield, as expressed in income oriented ETFs. Near exponential growth since QE was started.
After the market bottom in early 2016 emerging market ETF assets have seen near-vertical growth.
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