EM Weekly Fund Flows Monitor Foreign selling led by Korea w w

Portfolio Strategy Research 21 August 2026 | 5:28PM BST

Foreign selling led by Korea w/w; Southbound outflows; Hedge funds continue net selling in August MTD, but at a reduced pace vs. July; Selling in North Asia partially offset by buying in China MTD

Foreign (FII) flows / positioning managers declined sharply MTD to the lowest level in Sunil Koul | n EM Asia ex-China markets saw FII outflows of US$1.5bn more than 1 year, while Net Leverage remained Goldman Sachs International

w/w, driven by Korea (-US$1.6bn). Non-Asia EMs saw range-bound. Net selling MTD was led by Korea and Timothy Moe, CFA | selling of ~US$0.7bn w/w, led by Brazil (-US$0.4bn). Japan, followed by Taiwan. The net allocation to Asia Goldman Sachs (Singapore) Pte

ended at 28.5%, representing an 11.7% OW compared Alvin So, CFA | to MSCI World benchmark (declining from 20% OW Goldman Sachs (Asia) L.L.C. HK/China Connect, Domestic retail flows Tarun Lalwani, CFA around mid-June). Buying in Chinese equities picked up n Southbound saw outflows of US$1.5bn w/w (Ytd | MTD. A-shares and H-shares led the buying flows, while Goldman Sachs India SPL US$46bn). Korea (+US$2.5bn) and Taiwan (+US$0.1bn) de-grossing was led by A-shares. Despite the recent saw retail buying this week. Ytd, Asian markets have seen Terry Chan buying, net allocation to Chinese equities remains near | Goldman Sachs (Asia) L.L.C. US$64bn retail inflows. its lowest level in the past five years. Taiwan saw Si Fu, Ph.D. approximately equal contribution from long and short | Goldman Sachs (Asia) L.L.C. Global Equity mutual fund flows sales, with net allocation ~flat at 6.2% (64th %ile Kinger Lau, CFA | n Equity funds globally saw inflows of US$40bn w/w (vs. 1-year), while Korea led the selling with long sales Goldman Sachs (Asia) L.L.C. US$16bn inflow last week). In DM, US funds saw net exceeding short sales 1.5 to 1, with net allocations John Kwon | buying of US$29bn. Europe (+US$0.2bn) saw muted declining to 4.2% (55th %ile 1-year). Goldman Sachs (Singapore) Pte buying, while Japan (-US$1.7bn) saw outflows w/w. In n Prelim MF Allocation (Jul): Based on prelim. July EPFR Amorita Goel, CFA EM, GEM funds saw US$2.1bn w/w inflow (+US$61bn data, EM funds are most OW Brazil/Mexico, and most | Goldman Sachs (Singapore) Pte ytd). UW Taiwan and India. Over the past 1 and 3-months, Mambuna Njie EM funds have trimmed exposure most in Taiwan. | Focus: HF and MF Positioning Sectorally, funds are most OW China Industrials, Brazil Goldman Sachs International

n Hedge Fund Positioning (Aug): GS Prime Services data energy while most UW North Asia Tech H/W & Semis show that gross leverage for Asia Fundamental L/S and China / Taiwan Banks. The largest allocation cuts have been TW tech in past 1 and 3 months.

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Goldman Sachs EM Weekly Fund Flows Monitor

Focus: Hedge Fund Positioning (Mid-August)

Exhibit 1: GS Prime Services data show that gross leverage for Asia Fundamental Exhibit 2: ... while Net Leverage remained rangebound ending at 59.3% (59th L/S managers declined sharply by 14.5 pct pts MTD to 181.0% (lowest level in %ile 1- year, 82nd %ile 5-year). more than 1 year, 43rd %ile 5-year)...

Gross Leverage: Asia Fundamental L/S Net Leverage: Asia Fundamental L/S

Source: Goldman Sachs FICC and Equities Source: Goldman Sachs FICC and Equities

Exhibit 3: Net selling was led by Korea and Japan, followed by Taiwan; partially Exhibit 4: After sharp declines in July, allocations to the Asian region remained offset by buying flows in China. On a net basis, Japan remains the only market ~flat MTD. The net allocation to Asia ended at 28.5%, representing an 11.7% net bought YTD while Korea is the most net sold market in the region overweight compared to MSCI World benchmark (declined from 20% OW around mid-June)

Net Trading Flows: Asia Markets Net Regional Allocation | O/U Weights vs MSCI AC World

% of Regional Gross MV at start of Period 16% 25%

% of Asia Net MV at start of 2026 20% Asia (DM+EM) 12% 15% 8% 10% Europe 5% 4% Japan 0% China + HK -5%…