There is definite proof that sustainability-focused funds are outperforming their conventional counterparts. But some experts believe the traditional explanations for this are wrong.
The net inflows for emerging market funds were registered from July onwards, after the fallout from the US subprime mortage crisis. Prior to that emerging market funds were experiencing net outflows.
US, Europe and Japan funds suffered a net outflow of $56 billion in the first 10 months of this year.
With investors still unsure where the sub-prime bodies are buried, they also bailed out of financial and real estate sector funds. Doubts about the outlook for US, European and Japanese economic growth also weighed on energy and consumer goods sector funds.
Just last week, global emerging market equity funds posted the biggest net inflows, or $1.21 billion, of any major equity fund group for that week.
When it came to market-specific funds, investors moved towards the larger emerging economies.
ôInvestors globally have been gravitating to the sounder economic and fiscal story that emerging markets represents, but the ever-weakening dollar, if it turns into a destabilizing rout, could even damage the current rosy sentiment of investors towards emerging markets,ö says Massachusetts-based Brad Durham, managing director at EPFR Global.
Net inflows to Brazil, South Korea, China, Greater China and Russia country funds totalled $878 million while BRIC equity funds took a net of $480.6 million. Combined, that made up 56% of last weekÆs net inflows into all emerging markets funds, up from 30.5% the previous week.
To get the clarity they want to make informed portfolio decisions, asset owners and managers must now blend and adapt multiple sources of traditional and non-traditional data to create actionable insights, said speakers at a webinar hosted by AsianInvestor and IHS Markit.
The country's largest insurer Ping An set up a $62 billion green investment target by 2025. Several more players are also joining the hunt for sustainable assets.
The boss of Thailand’s second-largest pension fund hopes that proposed changes in the law will help her diversify more into overseas markets. She is particularly bullish on China.
Investors can still find spread premiums in niche private debt, with the asset class's prognosis looking strong, said a keynote speaker at AsianInvestor’s latest summit on Wednesday.