Emerging markets have moved past a phase of capital outflows, and recent strong inflows are projected to continue through the year-end, the Institute of International Finance (IIF) said on Thursday.

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IIF economists wrote that positive COVID-19 vaccine news delivered "a powerful boost to global demand" that lured investors toward emerging economies' assets.

"We are recording the strongest pace of non-resident portfolio flows to EM in many years," the report said.

Flows to emerging markets outside of China are at their strongest pace since Q2 2014, the IIF said.

"The exodus of capital from emerging markets is now firmly in the rearview mirror and robust inflows look set to continue," wrote Robin Brooks, chief economist, and Jonathan Fortun, economist at the IIF.

If December keeps the pace since October, the fourth quarter could see the highest level of net EM debt issuance ever, according to IIF's data.

"Putting this issuance picture together with our high-frequency tracking of flows paints a picture of strong recovery, with flows returning to their strongest level since Q1 2012," said the IIF.