Mutual Fund Investment in Emerging Markets: An Overview

Posted: 7 May 2002

See all articles by Graciela Kaminsky

Graciela Kaminsky

National Bureau of Economic Research (NBER); George Washington University - Department of Economics

Richard K. Lyons

University of California, Berkeley; National Bureau of Economic Research (NBER)

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

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Abstract

International mutual funds are key contributors to the globalization of financial markets and one of the main sources of capital flows to emerging economies. Despite their importance in emerging markets, little is known about their investment allocation and strategies. This paper provides an overview of mutual fund activity in emerging markets. First, we describe their relative size, asset allocation, and country allocation. Second, we focus on funds' behavior during emerging markets crises in the 1990s, analyzing data at both the fund-manager and fund-investor levels. Due to large redemptions and injections, funds' flows are not stable. Withdrawals from emerging markets during recent crises were large, which is consistent with existing evidence of financial contagion.

Keywords: mutual funds, emerging markets, capital flows, equity investment, contagion, crises

JEL Classification: F3, G1, G2

Suggested Citation

Kaminsky, Graciela and Lyons, Richard K. and Schmukler, Sergio, Mutual Fund Investment in Emerging Markets: An Overview. World Bank Economic Review, Vol, 15, No. 2, August 2001. Available at SSRN: https://ssrn.com/abstract=296965

Graciela Kaminsky

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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George Washington University - Department of Economics ( email )

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HOME PAGE: http://www.gracielakaminsky.com/

Richard K. Lyons

University of California, Berkeley ( email )

Haas School of Business
Berkeley, CA 94720
United States
510-642-1059 (Phone)
510-643-1420 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sergio Schmukler (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

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