Asia EM Equity Strategy: Asia Pacific Flows & Positioning Guide

In September, foreign investors broadly net sold APxJ equities while continuing to buy Japan: they net sold US$17.0bn of Korean, US$4.1bn of Indian and US$2.3bn of Taiwan equities, alongside net selling in Indonesia and Thailand, while net buying US$11.4bn of Japanese equities. EM equities saw inflows from foreign ETFs in September, while active foreign funds recorded net outflows; within China, active foreign funds were net sellers while domestic passive funds were net buyers. HF activity remained subdued amid macro and geopolitical uncertainty, with Asia hedge funds' gross exposure at 127%, near 12-month trough levels. In August, GEM long-only investors reduced their underweights in China and Taiwan, funded by increasing underweights in South Africa and India and trimming their Brazil overweight;