(Reuters) – March saw the first outflows of portfolios from emerging markets in a whole year. This was due to investors abandoning Chinese assets as well as growing anxieties over recent geopolitical developments, according to a report released Tuesday by Institute of International Finance (IIF).

IIF data revealed that foreign net outflows to emerging markets reached $9.8billion in March. This follows a February inflow of $13.3billion. Bonds saw $3.1 Billion depart, and developing stocks fell $6.7 billion.

IIF considered China’s $11.2 Billion in outflows to bonds and $6.3 Billion in stock transactions an “unprecedented” dynamic, which suggested a market shift away from the assets of China’s second largest economy. Since September 2020, this is the first outflow of equities from China.

Jonathan Fortun, an IIF economist said that although it was premature to draw conclusions, China’s timing suggests that foreign investors are reassessing their exposure. A rotation of preferences may begin to occur.

He said that investors were more cautious in the first quarter because of tighter monetary policies and higher inflation.

Net inflows to emerging markets ex-China were $8.2billion, with a smaller outflow in equity at $400m. Russia was not included in the March report.

The net inflow to Latin America was $10.8 billion, compared to $7.7 billion for February and $5.7 billion for March 2021. The data shows that this was the highest inflow since July.

“Moving forward, we expect greater volatility in flows dynamics. As some countries have bottomed out, they could potentially profit from higher commodity prices. However.