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.
