Fri, Mar 29, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

Alternative emerging markets funds offers better diversification in current market conditions

Monday, October 27, 2014

Komfie Manalo, Opalesque Asia:

The emerging markets, which are expected to reach 40% of the world’s gross domestic product (GDP), offers better option for diversification purposes in the current market conditions, said Lyxor Asset Management’s Weekly Brief.

Philippe Ferreira, Lyxor AM’s head of research, managed account platform, said that emerging markets (EM) would soon represent 40% of world GDP. However, they barely represent 10% of global equity indices. Consequently, benchmarked portfolios structurally underweight EM equities compared to the size of EM in the global economy. There are some reasons for this, such as the higher volatility of EM equities, lower percentage of free float than in developed markets, higher transaction costs etc. Nevertheless, this gap appears largely unwarranted today.

He continued, "The key question is therefore how much to invest in emerging markets. As stated in recent academic research, "a market capitalization-based benchmark can be viewed as the lower bound on the asset allocation to emerging markets"

Two main features of Lyxor’s latest data showed the following:

  • The incomplete integration of EM into world markets and their relatively small equity market capitalization creates potentially attractive investment opportunities. Nevertheless, EM equities have disappointed over the recent years, underperforming developed markets (DM) equities. Six years after the de......................

    To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1