On the creations side, Emerging Market funds
took in over 38% of inflows.
Summary: Rightly or wrongly, emerging market funds
have suffered from a perception of poor governance.
The demand for independent valuations in emerging market funds
is indicative of the way investors select funds today.
Investors are pulling money out of emerging market funds
as rising interest rates in the US weaken emerging market assets, Bloomberg reported.
Only among diversified emerging market funds
did the active funds outperform the passive.
It would stand to reason that fund performance would drive assets flows, yet emerging market funds
bucked this trend last year, according to data from Strategic Insight.
The firm also manages GCC stocks through its Arabian fund which was first distributed to Japanese retail investors in 2007 as well as its Frontier and Emerging Market funds
, and maintains a positive long term view on the region.
The ETF is likely to be the vehicle of choice for passive Emerging Market Funds
once the UAE is upgraded to MSCI Emerging Market status in June," said Saleem Khokhar, the head of equities at NBAD's asset management group.
The research included: 9 funds in the group of "Domestic Emerging Market Funds
"; 10 funds in the group of "Foreign Emerging Market Funds
"; 8 funds in the "Domestic Developed Market Funds"; and 9 funds in the "Foreign Developed Market Funds."
"Our trading sources also indicate that additional foreign inflows may well be limited with many global emerging market funds
already having some off-benchmark exposure to GCC equity markets.
Nearly half of advisors plan to increase portfolio allocations devoted to emerging market funds
. And close to one-third intend to invest more in other alternate vehicles, according to a new report.