Investors are becoming more finicky when it comes to the emerging markets, eschewing broad exposure and scrutinizing countries on a case-by-case basis. With country-specific exchange traded funds, anyone can customize their emerging market exposure.
Create Research and Principal Global Investors have found that many investors are looking through individual countries more closely after experiencing broad emerging market volatility, reports Chris Vellacott for Reuters. [EM ETFs: All Countries Are Not Created Equal]
In a survey of 700 pension funds, sovereign wealth funds, consultants and asset managers across 30 countries with $29.7 trillion in assets, the percentage who remain optimistic about the emerging markets nearly halved in two years.
“Investors have not lost faith in the emerging market story; they are simply questioning it. The scales have tilted somewhat from 2012 to 2014,” according to the report.
The survey discovered that “believers” in emerging markets dipped to 20% from 38% between 2012 and 2014, whereas “skeptics” jumped to 28% from 18%.
The results line up with the Federal Reserve’s decision to taper its record quantitative easing policy, which would pull back access to easy money that has fueled emerging market stocks.