LatAm Equity Strategy: Flows to know

Research evidence excerpt

LatAm Equity Strategy: Flows to know

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LatAm Equity Strategy

Flows to know

Investment Strategy

EM tech remains the focal point of inflows 09 July 2026

EM equities are up 20% YTD largely driven by tech, while LatAm underperformed YTD Investment Strategy

(see Quilt of Returns in Exhibit 5). Yet EM sentiment deteriorated in the last month as AI Latin America

concerns rise and global financial conditions tighten (BofA US economists expect three

Fed hikes this year, see their Federal Reserve Watch report). Global flows to EM (ex-

China) were negative in June (Exhibit 8), though investors continued to rotate into tech-

heavy EMs South Korea and Taiwan and rotated out of LatAm (Exhibit 11). Paula Andrea Soto, CFA >>

LatAm Equity Strategist

Merrill Lynch (Brazil)

+55 11 2188 4226Outflows from EM ex-China accelerated in June paula.soto@bofa.com

EM ex-China funds had -US$8bn outflows in June, from -US$6bn in May (Exhibit 8).

David Beker >>

Zooming in into the different EM regions, we note that flows continued to rotate away Bz Econ/FI & LatAm EQ Strategy

from LatAm & India and into South Korea & Taiwan over the past month (Exhibit 11). Merrill Lynch (Brazil) +55 11 2188 4371

This signals reduced interest in broad EM, while the AI/tech narrative remains resilient. david.beker@bofa.com

YTD flows into EM ex-China remain positive at +US$82bn, after +US$48bn in 2025 Carlos Peyrelongue >>

(Exhibit 8). MexMerrillEqLynchStrat/Research(Mexico) Analyst

+52 55 5201 3276

Redemptions slow down, but equity allocation close to lows carlos.peyrelongue@bofa.com

Equity allocation within the Brazilian fund industry declined to 7.7% in May, down from MateusLatAm EquityConceicaoStrategist>>

from 8.0% in April (Exhibit 43). This is the lowest level since May-25.