Asset Managers in Emerging Market Economies
16 Pages Posted: 1 Oct 2014
Date Written: September 2014
The turbulence in emerging market economies (EMEs) in mid-2013 has reminded policymakers and investors of the importance of actions by large asset managers for relatively small and illiquid EME asset markets. The presence of asset managers in EMEs has grown considerably, and the concentrated use of benchmarks and the directional co-movement of investor flows can generate correlated investment patterns that may create one-sided markets and exacerbate price fluctuations. Indeed, we provide evidence showing that, during the past two years, investor flows to asset managers and EME asset prices have reinforced each other's movements.
JEL Classification: G11, G15, G23
Suggested Citation: Suggested Citation