We have unveiled a new database on EM real money positioning. We begin to add bank-intermediated flows to our database, which comove with real money flows in Turkey and Argentina. The EM positioning overhang may be greater than initially assumed.

We have introduced a new measure of real money positioning in EM, which extends the IIF’s well-known work on capital flows to positioning. Our positioning data are calibrated to match stock positions in the BoP, so by construction are representative of the full positioning picture.

Foreign capital flows to EM are a key, but incomplete, part of the positioning story, since they capture buying and selling, but not all the valuation changes in between. We unveil a new database that adds valuation changes to our existing flows work, giving, to our knowledge, the most complete and up-to-date EM positioning snapshot.

2018 has been a difficult year for many emerging markets, but sentiment has recently shifted more positive in many cases, reflecting cheap valuations, a dovish Fed, and a China-US trade “truce.” With sentiment more positive, market focus is squarely on positioning, with people asking how much positioning was cut during the EM sell-off. We develop new data that give a comprehensive look at EM positioning, combining IIF work on capital flows with valuation changes on the stock, where the latter historically account for the bulk of positioning changes.

The EM sell-off has been large for Argentina and Turkey, which raises the risk of contagion to the broader EM complex. We examine non-resident port