Institutional Investors Appeal to Emerging Markets Despite Negative Forecasts

KanagawaGenerally, sovereign wealth funds are long-term public investors that have the capability to weather financial storms. Gulf-based sovereign funds have augmented equity allocation to emerging markets. Across the Pacific Ocean, the Alaska Permanent Fund maintains a position that emerging markets are a solid bet due to relatively faster economic growth rates.

Convinced public investors perceive emerging market investments will outperform developed-market stocks in the long-run since those economies possess characteristics such as a low debt-to-GDP ratio and a growing consumer base. Many large U.S. pension fund managers currently believe they are underweight in allocation to emerging economies. These pensions continue to solicit asset managers that follow an actively-managed strategy in developing markets.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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