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Speaker 1: Our guest is Cameron Brandt, Director of Research yet Emerging

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Speaker 1: Portfolio Fund Research ep f R. Joining us with us

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Speaker 1: live here or joining us live hopefully with some pearls

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Speaker 1: of wisdom. Cameron, thank you very much for taking out

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Speaker 1: the time. Well, the the advanced by the military in

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Speaker 1: Ukraine on ground that's been controlled by Russia would seem

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Speaker 1: to be good for the Euro. I mean it could

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Speaker 1: be good for a lot of people as well, but

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Speaker 1: the Euro is advancing this morning. Just your thoughts on

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Speaker 1: that as we as we come out of the weekend. Um, well,

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Speaker 1: it's you know, certainly extremely impressive. I don't know what

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Speaker 1: Ukraine has been able to achieve. Um, as with everything

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Speaker 1: in life, being careful not to overreact, maybe the real

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Speaker 1: point here both in terms of them advancing beyond their

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Speaker 1: supply lines, which you know they're certainly talking as if

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Speaker 1: they understand, um. But also this is going to encourage

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Speaker 1: those who who want a negotiated settlement, even if it

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Speaker 1: means the Ukraine not getting back everything it's lost, So

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Speaker 1: that liked and go back to some semblance of normal.

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Speaker 1: So I think after you know, this first of euphoria

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Speaker 1: is over, you know, the will will sort of some

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Speaker 1: thorny or questions, both in Ukraine and among its supporters

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Speaker 1: in Europe will raise their heads. But you see, the

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Speaker 1: thing is, ultimately, if you push Vladimir Putting into the

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Speaker 1: economy and may reassess his military campaign thus far, and

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Speaker 1: it could actually unfortunately result in more let's say, aggressive

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Speaker 1: actions from Moscow, not least of course the N word.

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Speaker 1: That's true. You know, I'm not in the camp that

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Speaker 1: thinks that Russia will turned uh nuclear weapons, but I

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Speaker 1: would qualify that by saying that, well, it looked extremely

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Speaker 1: unlikely earlier in the conflict, which was the Ukraine we're

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Speaker 1: taking Primeea, is starting to look less unlikely. Uh, and

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Speaker 1: that really would heat pressure on Putin and his inner circle. Yeah, well,

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Speaker 1: it's probably too soon, you know, to really be playing it.

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Speaker 1: As you mentioned in your opening comments, Europe still looks

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Speaker 1: like a kind of rocky terrain. Let's talk a little

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Speaker 1: bit more about the big macro picture, and particularly with

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Speaker 1: the US that the bond market there seems to be

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Speaker 1: suggesting that the Fed could pull off a soft landing.

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Speaker 1: In addition to the five year tips that I mentioned

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Speaker 1: a few moments ago, the five year five year inflation

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Speaker 1: swap rate is down to two point five. Now that

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Speaker 1: is suggesting that there's better times head. Do you buy it? Um?

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Speaker 1: I'm not sure i'd buy it, but I agree with

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Speaker 1: you that a lot of investors do believe that that's

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Speaker 1: a likely outcome. UM. One of the things though, that

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Speaker 1: I've been paying a bit of attention to recently, and

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Speaker 1: it's really slipped under the radar screen for some time,

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Speaker 1: is the fact that in addition to the interest rate hikes,

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Speaker 1: the feed is also running down its balance sheet. UM. Now,

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Speaker 1: the amounts in the general scheme of things have not

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Speaker 1: been uh that big and certainly nothing to deter focus.

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Speaker 1: It's like an invisible specter out there, isn't it right? Uh?

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Speaker 1: And September one was the date that certainly in the

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Speaker 1: timetable they released earlier this year, was when that jumped

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Speaker 1: from forty seven billion a month to nine billion. And

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Speaker 1: we thought we did see a reaction in blows to

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Speaker 1: mortgage backed funds and real estate funds. This week, now

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Speaker 1: for the for the first time in over six years,

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Speaker 1: you you're pointing out that equity funds with e s

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Speaker 1: G or s r I mandates have posted outflows. Now

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Speaker 1: that's a three consecutive weeks of that. Your tantalizing say that,

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Speaker 1: but you don't tell us why. Um. A good question

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Speaker 1: because and there's no sort of one reason. I think,

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Speaker 1: uh more an issue of concern about what the new

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Speaker 1: European regulations mean. Uh. The fact that Florida, major state

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Speaker 1: here in the US, has uh sort of moved against it,

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Speaker 1: ums a fair amount of bad publicity about what they

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Speaker 1: call greenwashing. And also performance E s G funds have

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Speaker 1: not been outperforming their non E s G pers and

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Speaker 1: they usually come with a higher cost um. But that

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Speaker 1: some of that was true before this year and then

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Speaker 1: really before the third quarter. Uh, and people were willing

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Speaker 1: to overlook it. That seems to have changed. Yeah, Well,

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Speaker 1: the need is out there for more energy now, and

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Speaker 1: so people are sometimes setting aside some of the loftier

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Speaker 1: goals for uh sort of meat and potatoes needs. That's

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Speaker 1: one thing. Um, if we look at the ways that

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Speaker 1: you're playing your current view of the world, what's what's

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Speaker 1: near the top of the list? Um, well, certainly what

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Speaker 1: the picture that we're seeing. Um. Uh. You know, we

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Speaker 1: study fun flows uh in the developed markets, it's it's

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Speaker 1: uh stepping up a search for income. Uh. So even

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Speaker 1: though uh bond markets have been somewhat volatile and under pressure. Uh.

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Speaker 1: There's a lot of demand for sovereign debt now that

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Speaker 1: it yields yielding UM more than a few basis points,

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Speaker 1: even if that yield is under the rate of inflation.

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Speaker 1: And dividend equity funds remain extremely popular in the emerging

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Speaker 1: market space. Basically big is good. UM. Russia is obviously

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Speaker 1: on the sidelines at the moment, but China equity funds

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Speaker 1: continue to get frankly surprising levels of inflows. There's more

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Speaker 1: interest in Brazil now that expectations are that are proven

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Speaker 1: Centrist maybe in office by the end of the year. UH.

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Speaker 1: And we've seen a marked up taking interest in India,

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Speaker 1: which is shared on both sides. Diversified fund managers are

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Speaker 1: increasing their exposure to that market. UH. And we're seeing

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Speaker 1: marked pick up in flows into dedicated India equity funds.

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Speaker 1: I mean, it's something which happens that there's always this

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Speaker 1: old adage that well, India is going to do very well,

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Speaker 1: and in ten years time, India will do very well.

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Speaker 1: It's good comes to these and tomorrow, and of course

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Speaker 1: people say, then this time it's different, is it? UM?

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Speaker 1: I think I think the question you raise is very

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Speaker 1: valid in the short run. It's slightly different because, uh,

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Speaker 1: you know, it's fairly hard to think of of of

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Speaker 1: a stage being set the way COVID last year set

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Speaker 1: the stage for India to bounce back. So you're getting

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Speaker 1: some you know, there's some real pent up demand. Comparisons

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Speaker 1: are extremely favorable. Um, but yeah, I think longer term

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Speaker 1: you do need to be cautious. India does have its

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Speaker 1: demographic dividend, but that won't last forever. And you know,

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Speaker 1: economic policy continues to be status u despite Prime Minister

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Speaker 1: Moody's you know, uh, I wouldn't say lip service, but

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Speaker 1: general into the asum for free markets. Cameron always a pleasure,

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Speaker 1: have a great day of a great week as well.

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Speaker 1: That's Cameron Brant, their director of researcher Emerging Portfolio Fund

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Speaker 1: Research ep F, are getting his take on the mug