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Monday, 26 December 2016

International news on 26 January 2016: Redemptions on EM equities hit 5-week high, has the great rotation from bonds to stocks begun?

Other international stories worth noting things morning:

  • Net redemptions from emerging market equity funds hit a five-week high the week before last the Financial Times (paywall) reports. Investors withdrew USD 3.7 bn from EM equities “amid pressure from the rising dollar and uncertainty about trade policy in the US, especially with China.”
  • Has the “great rotation” begun? Business Insider has picked up on a Deutsche Bank slide suggesting that USD 3 tn in AUM have left bonds and poured into stocks since the US election in November. Writes the site: “The elusive great rotation from bonds to stocks is finally happening. About a decade ago, investors started a big shift in their asset allocations away from bonds and into stocks. That prompted calls that bond funds would experience an even greater exodus that would end the bull market.”
  • Deutsche Bank and Crédit Suisse have both agreed to settle with the US Justice Department “over the alleged mis-selling of mortgage-backed securities in the run-up to the financial crisis,” the FT reports.
  • The war on hedge funds broke into mainstream media over the weekend, with prominent pension funds acknowledging they’re pushing to revise the 2 and 20 formula. Read the New York Times’ “Hedge Fund Math: Heads We Win, Tails You Lose.”
  • George Michael, the 1980s pop superstar, has died at age 53 in his UK home. Police in are describing the death as “unexplained but not suspicious.” Obits in the Guardian and the New York Times.
  • Red Army Choir killed in air disaster: The bad news doesn’t stop there: If you, like us, grew up admiring performances of the Red Army Choir, you’ll be heartbroken to hear that what appears to be the entire Alexandrov Ensemble, one of two companies that has the right to call itself the Red Army Choir, were among the 92 people killed in an air disaster yesterday. The aircraft went down shortly after takeoff; it was flying the troupe to Syria for a New Year’s Eve performance for Russian troops stationed there. More in Reuters and the New York Times. A video of a the ensemble in performance is here (run time: 1:00), or you can listen to them playing Christmas music here (run time: 1:08).

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