Rising fund flows
Emerging market equities saw net inflows of $0.45 billion for the week ended April 10, 2014. The previous week, net inflows totaled $0.38 billion. Asset managers such as BlackRock (BLK), Fidelity Investments, Franklin Resources (BEN), Goldman Sachs (GS), HSBC Asset Management (HSBC), and Blackstone (BX) have increased their asset allocations in this market class. They’re betting that an aggressive monetary policy stance will be adopted by major economies to support growth.
Investments in emerging markets (EEM) form approximately 12% of worldwide investments in terms of mutual funds and ETFs.
The emerging economy offerings by mutual funds and ETF providers are expected to increase. Reform initiatives by major countries to further open economies, remove currency restrictions, and deploy funds are helping emerging regions attract more funds.
ETFs for emerging markets
Emerging market ETF options have increased over the past few years. Asset managers including BlackRock (BLK), JP Morgan (JPM), Deutsche Asset & Wealth Management (DB), and others now offer their investment products in emerging markets.
Major ETFs such as the iShares MSCI Emerging Markets (EEM), the WisdomTree India Earnings Fund (EPI), the iShares MSCI Emerging Markets Minimum Volatility ETF (EEMV), and the iShares MSCI India ETF (INDA) attracted positive flows totaling $0.55 billion for the week ended April 10, 2014.
Net flows are likely to rise for ETFs associated with performing economies. Having said that, US (SPY) ETFs are seeing outflows, while Europe is attracting inflows due to easing by its central bank.