Emerging-market ETFs recorded their 17th consecutive week of inflows as investors bet on potential rate cuts across developing economies while the US dollar weakens. The sustained capital flows reflect growing optimism about emerging market growth prospects relative to developed markets.

Perth Tolle, founder of Life and Liberty Indexes, joined Bloomberg's "ETF IQ" to discuss the trend. Her firm specializes in freedom-weighted emerging market indexes that exclude countries with authoritarian regimes. The inflows come as emerging market central banks may soon cut rates following the Federal Reserve's expected easing cycle.

This marks the longest streak of inflows since 2020, suggesting investors are positioning for a potential emerging market rally. The dollar's weakness typically benefits emerging market assets by making dollar-denominated debt more manageable and boosting commodity prices. With the Fed signaling rate cuts, emerging markets may gain an additional tailwind as capital rotates from defensive US assets to higher-yielding developing market opportunities.