Evolution of Emerging Markets in Non-U.S. Equity Portfolios
In Early 2010, InterSec examined how the growth in emerging markets allocations in non-U.S. equity portfolios has evolved. Through a review of the InterSec EAFE Plus, ACWI ex-U.S. and Emerging Markets Universes, we show that correlations between developed and emerging components of non-U.S. portfolios have increased over time. However, we note that the performance and risk characteristics of the emerging markets component within EAFE Plus and ACWI ex-U.S. mandates differs considerably from exposure through an emerging markets specialist mandate. In addition, by examining recent trends in fund flows to these mandates, we provide greater insight into investor appetite for these strategies and shed light on how emerging markets exposure may progress.