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Stock Pickers Left Out of $50 Billion Emerging-Markets Rush

  • Investors pull $10.6 billion from active emerging equity funds
  • Inflows to emerging bond funds $39.9 billion, 80% of total
Updated on

A glance under the hood of this year’s emerging-market rally signals many investors aren’t yet convinced an economic rebound in developing countries has taken hold.

While a net $50 billion rushed into developing-country stock and bond funds in 2016, only 20 percent went into shares and all of that to lower-cost passive exchange-traded funds tracking indexes. Active money-managers of equity portfolios suffered outflows of almost $11 billion this year through Sept. 23, according to data company EPFR Global. These stock-pickers charge more and typically only attract clients once they’re convinced an investment case has legs.