Mutual Fund Investment in Emerging Markets : An Overview

Kaminsky, Graciela ; Lyons, Richard ; Schmukler, Sergio

World Bank, Washington, DC

关键词: ACCOUNTING;    ASSET VALUE;    ASSETS;    ASYMMETRIC INFORMATION;    BANK LENDING;   

DOI  :  10.1596/1813-9450-2529
RP-ID  :  WPS2529

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

International mutual funds are one ofthe main channels for capital flows to emerging economies.Although mutual funds have become important contributors tofinancial market integration, little is known about theirinvestment allocation, and strategies. The authors providean overview of mutual fund activity in emerging markets.First, they describe international mutual funds'relative size, asset allocation, and country allocation.Second, they focus on fund behavior during crises, byanalyzing data at the level of both investors, and fundmanagers. Among their findings: Equity investment inemerging markets has grown rapidly in the 1990s, much of itflowing through mutual funds. Collectively, these funds holda sizable share of market capitalization in emergingeconomies. Asian, and Latin American funds achieved thefastest growth, but are smaller than domestic U.S. funds andworld funds. When investigating abroad, U.S. mutual fundsinvest more in equity than in bonds. World funds investmainly in developed nations (Canada, Europe, Japan, and theUnited States). Ten percent of their investment is in Asia,and Latin America. Mutual funds usually invest in a fewcountries within each region. Mutual fund investment wasvery responsive to the crises of the 1990s. Withdrawals fromemerging markets during recent crises were large, whichsquares with existing evidence of financial contagion.Investments in Asian, and Latin American mutual funds arevolatile. Because redemptions, and injections are large,relative to total funds under management, fund's flowsare not stable. The cash held by managers during injections,and redemptions does not fluctuate significantly, soinvestors' actions are typically reflected in emergingmarket inflows, and outflows.