“Emerging markets bolstered by carry trade in currencies,” reports the Financial Times. Except, of course, not in Egypt, where the trade is practically non-existent right now given the FX situation. Just to be clear: The piece makes no mention of Omm El Donia, we’re just noting that while other EM are benefitting from the carry trade, it’s doing bupkis for us. (The carry trade is essentially the practice of borrowing at a low interest rate — say, in USD — then buying another asset that’s likely to provide a higher return, such as another currency that grants a substantially higher interest rate. Like, in theory, the EGP. Still foggy on the carry trade? Khan Academy has a reasonable primer that breaks it down. Watch: run time 4:02.)

Bond funds look to EM…Meanwhile, the Wall Street Journal (paywall) notes that bond funds managed by BlackRock, Oppenheimer and Legg Mason are turning to emerging market as antidotes to low and negative yields in the developed world. The paper notes that “Global bond funds raised their emerging-market allocations in the first week of August to 10.6% from 9.8% in February. That is the highest level in about a year, according to the Institute of International Finance. The recent high was a 14% allocation to emerging markets in 2013.”

EM back in favour, but investors take a pass on China: Emerging markets may be back in vogue after recording net outflows in January through March, but “the rush to invest in emerging markets has bypassed the biggest one of all: China,” the WSJ notes elsewhere (paywall). Noteworthy: The chart about half-way down showing net inflows into EM funds moving ‘up and to the right’ at the same time as inflows into China-specific funds craters. “The wariness partly reflects how unnerved global investors remain by markets that have proved exceptionally unpredictable, even by emerging-market standards.”