Edgardo Sternberg, vice president and emerging markets portfolio manager at Loomis, Sayles & Company in Boston: “The fall in the holdings of local government bonds by foreigners starting at the end of 2019 was prompted by the violent riots in October 2019, the ensuing increase in government spending, large emergency pension withdrawals for families to cope with the economic effects of the Covid-19 pandemic and the uncertainty resulting from the process of constitutional reform. The election of President Boric accelerated the departure of foreigners scared by its less market-friendly economic policies. The increase in foreign investors’ holdings this year is a combination of many factors, namely: 1.) disenchantment with U.S. exceptionalism and the ensuing exit from overstretched positions in U.S. assets leading to a weakening of the U.S. dollar—likely a multi-year event—and strengthening of emerging markets’ currencies, especially those of Latin America; 2.) high nominal and real yields; 3.) resurging copper prices; 4.) sustained and resilient growth of the economy; and 5.) the…”