Mutual Fund Investment in Emerging Markets : An Overview
International mutual funds are one of the main channels for capital flows to emerging economies. Although mutual funds have become important contributors to financial market integration, little is known about their investment allocation, and strate...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/01/891729/mutual-fund-investment-emerging-markets-overview http://hdl.handle.net/10986/18336 |
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okr-10986-183362021-04-23T14:03:44Z Mutual Fund Investment in Emerging Markets : An Overview Kaminsky, Graciela Lyons, Richard Schmukler, Sergio L. ACCOUNTING ASSET VALUE ASSETS ASYMMETRIC INFORMATION BANK LENDING BANK LOANS BONDS CAPITAL FLOWS CAPITAL MARKETS CASH FLOWS CONTAGION CURRENT ACCOUNT DEBT DEBT CRISIS DEVALUATION DOMESTIC FUNDS EQUITY MARKETS FINANCIAL MARKETS FINANCIAL SUPPORT FOREIGN DIRECT INVESTMENT FOREIGN INVESTORS GDP GLOBALIZATION GLOBALIZATION OF FINANCIAL MARKETS HEDGE FUNDS INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATES INVESTMENT COMPANY LIQUIDITY MACROECONOMICS MARKET INTEGRATION MUTUAL FUND MUTUAL FUNDS PORTFOLIO PORTFOLIOS PRIVATE CAPITAL SECURITIES STOCK MARKETS STOCK PRICES TRANSITION ECONOMIES TREASURY BILLS MUTUAL FUND RATING TRANSITION ECONOMIES CAPITAL FLOWS FINANCIAL LIBERALIZATION ASSET ALLOCATION ECONOMIC CRISIS FINANCIAL CRISES INVESTOR CONFIDENCE FINANCIAL MANAGEMENT EQUITY INVESTMENTS CAPITALIZATION MARKET INTEGRATION TREASURY BILLS MUTUAL FUND RATING International mutual funds are one of the main channels for capital flows to emerging economies. Although mutual funds have become important contributors to financial market integration, little is known about their investment allocation, and strategies. The authors provide an 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, by analyzing data at the level of both investors, and fund managers. Among their findings: Equity investment in emerging markets has grown rapidly in the 1990s, much of it flowing through mutual funds. Collectively, these funds hold a sizable share of market capitalization in emerging economies. Asian, and Latin American funds achieved the fastest growth, but are smaller than domestic U.S. funds and world funds. When investigating abroad, U.S. mutual funds invest more in equity than in bonds. World funds invest mainly in developed nations (Canada, Europe, Japan, and the United States). Ten percent of their investment is in Asia, and Latin America. Mutual funds usually invest in a few countries within each region. Mutual fund investment was very responsive to the crises of the 1990s. Withdrawals from emerging markets during recent crises were large, which squares with existing evidence of financial contagion. Investments in Asian, and Latin American mutual funds are volatile. Because redemptions, and injections are large, relative to total funds under management, fund's flows are not stable. The cash held by managers during injections, and redemptions does not fluctuate significantly, so investors' actions are typically reflected in emerging market inflows, and outflows. 2014-05-14T22:20:54Z 2014-05-14T22:20:54Z 2001-01 http://documents.worldbank.org/curated/en/2001/01/891729/mutual-fund-investment-emerging-markets-overview http://hdl.handle.net/10986/18336 English en_US Policy Research Working Paper;No. 2529 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ASSET VALUE ASSETS ASYMMETRIC INFORMATION BANK LENDING BANK LOANS BONDS CAPITAL FLOWS CAPITAL MARKETS CASH FLOWS CONTAGION CURRENT ACCOUNT DEBT DEBT CRISIS DEVALUATION DOMESTIC FUNDS EQUITY MARKETS FINANCIAL MARKETS FINANCIAL SUPPORT FOREIGN DIRECT INVESTMENT FOREIGN INVESTORS GDP GLOBALIZATION GLOBALIZATION OF FINANCIAL MARKETS HEDGE FUNDS INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATES INVESTMENT COMPANY LIQUIDITY MACROECONOMICS MARKET INTEGRATION MUTUAL FUND MUTUAL FUNDS PORTFOLIO PORTFOLIOS PRIVATE CAPITAL SECURITIES STOCK MARKETS STOCK PRICES TRANSITION ECONOMIES TREASURY BILLS MUTUAL FUND RATING TRANSITION ECONOMIES CAPITAL FLOWS FINANCIAL LIBERALIZATION ASSET ALLOCATION ECONOMIC CRISIS FINANCIAL CRISES INVESTOR CONFIDENCE FINANCIAL MANAGEMENT EQUITY INVESTMENTS CAPITALIZATION MARKET INTEGRATION TREASURY BILLS MUTUAL FUND RATING |
| spellingShingle |
ACCOUNTING ASSET VALUE ASSETS ASYMMETRIC INFORMATION BANK LENDING BANK LOANS BONDS CAPITAL FLOWS CAPITAL MARKETS CASH FLOWS CONTAGION CURRENT ACCOUNT DEBT DEBT CRISIS DEVALUATION DOMESTIC FUNDS EQUITY MARKETS FINANCIAL MARKETS FINANCIAL SUPPORT FOREIGN DIRECT INVESTMENT FOREIGN INVESTORS GDP GLOBALIZATION GLOBALIZATION OF FINANCIAL MARKETS HEDGE FUNDS INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATES INVESTMENT COMPANY LIQUIDITY MACROECONOMICS MARKET INTEGRATION MUTUAL FUND MUTUAL FUNDS PORTFOLIO PORTFOLIOS PRIVATE CAPITAL SECURITIES STOCK MARKETS STOCK PRICES TRANSITION ECONOMIES TREASURY BILLS MUTUAL FUND RATING TRANSITION ECONOMIES CAPITAL FLOWS FINANCIAL LIBERALIZATION ASSET ALLOCATION ECONOMIC CRISIS FINANCIAL CRISES INVESTOR CONFIDENCE FINANCIAL MANAGEMENT EQUITY INVESTMENTS CAPITALIZATION MARKET INTEGRATION TREASURY BILLS MUTUAL FUND RATING Kaminsky, Graciela Lyons, Richard Schmukler, Sergio L. Mutual Fund Investment in Emerging Markets : An Overview |
| relation |
Policy Research Working Paper;No. 2529 |
| description |
International mutual funds are one of
the main channels for capital flows to emerging economies.
Although mutual funds have become important contributors to
financial market integration, little is known about their
investment allocation, and strategies. The authors provide
an 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, by
analyzing data at the level of both investors, and fund
managers. Among their findings: Equity investment in
emerging markets has grown rapidly in the 1990s, much of it
flowing through mutual funds. Collectively, these funds hold
a sizable share of market capitalization in emerging
economies. Asian, and Latin American funds achieved the
fastest growth, but are smaller than domestic U.S. funds and
world funds. When investigating abroad, U.S. mutual funds
invest more in equity than in bonds. World funds invest
mainly in developed nations (Canada, Europe, Japan, and the
United States). Ten percent of their investment is in Asia,
and Latin America. Mutual funds usually invest in a few
countries within each region. Mutual fund investment was
very responsive to the crises of the 1990s. Withdrawals from
emerging markets during recent crises were large, which
squares with existing evidence of financial contagion.
Investments in Asian, and Latin American mutual funds are
volatile. Because redemptions, and injections are large,
relative to total funds under management, fund's flows
are not stable. The cash held by managers during injections,
and redemptions does not fluctuate significantly, so
investors' actions are typically reflected in emerging
market inflows, and outflows. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Kaminsky, Graciela Lyons, Richard Schmukler, Sergio L. |
| author_facet |
Kaminsky, Graciela Lyons, Richard Schmukler, Sergio L. |
| author_sort |
Kaminsky, Graciela |
| title |
Mutual Fund Investment in Emerging Markets : An Overview |
| title_short |
Mutual Fund Investment in Emerging Markets : An Overview |
| title_full |
Mutual Fund Investment in Emerging Markets : An Overview |
| title_fullStr |
Mutual Fund Investment in Emerging Markets : An Overview |
| title_full_unstemmed |
Mutual Fund Investment in Emerging Markets : An Overview |
| title_sort |
mutual fund investment in emerging markets : an overview |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/01/891729/mutual-fund-investment-emerging-markets-overview http://hdl.handle.net/10986/18336 |
| _version_ |
1764440347953332224 |