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Tuesday, March 1, 2011

Asset Managers Have Turned Against Emerging Markets; Should You?

One would expect that the “hot money” of retail investors, which tends to buy high and sell low, would be quick to pull the trigger and chase higher performer assets. And they did. Emerging markets stock mutual funds shed 0.4% of assets in the week-ended Tuesday Feb 15., emerging markets stock ETFs redeemed 2.1% of assets, or $3.1 billion
But according to what the mutual fund companies tell us, their professional and experienced managers on the other hand would have the discipline to examine whether or not 8 weeks of data justify a major change in their investment strategy. They might be expected to take a closer look at whether the political instability of the headlines or the signs of inflation really warrant the wide divergence in performance of the last 8 weeks. Perhaps it might represent a chance to rebalance at attractive prices.
According to a New York Times article it seems that those investment “professionals” are as fickle as the most trigger happy individual investor.....

read the rest here

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