Hedge Funds Rework Currency Positions In Market Drop
"The dominant emerging-market foreign-exchange selling has been from hedge funds," Cochinos said Jan. 23. For investors with more than a one-month horizon, "we are 80 percent near the bottom," he said.
Investors have pulled cash out stock and bond funds, driving the MSCI emerging markets gauge to drop 6.6 percent in January, extending its worst start since 2009, while a JPMorgan Chase & Co. gauge of local-currency debt lost 2.7 percent last month.
"What we are seeing right now is a lot of money exiting the emerging markets," UBS AG Chief Executive Officer Sergio Ermotti, the head of Switzerland's biggest bank, said Feb. 4 in Zurich on Bloomberg Television's "Countdown." "Short term, it looks a little bit overdone."