Emerging Market Fund

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Emerging Market Fund

A mutual fund that invests predominantly or exclusively in the securities of a developing country or a group of developing countries. Emerging market funds may concentrate in a region, such as the Middle East, or in a given industry, such as oil in emerging markets. Emerging market funds tend to be volatile as they are heavily exposed to political risk. However, they offer the possibility of a high return because at least some emerging markets, notably Eastern Europe, experienced high growth in the 1990s. See also: BRIC.
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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.

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