Neutral Investor Sentiment Dominant in Emerging Markets

Among the key findings was that most respondents currently have either 5-10% (33%) or 1-5% (29%) of their equity allocation in emerging markets. Only 26% of respondents allocate more than 10% of their equity to emerging markets.

Furthermore, 49% say their current allocation is about the same as 12 months ago, while 37% say it is lower.
47% of respondents have a neutral outlook on EM equities, with the remaining evenly split between a negative and positive outlook.

“The survey confirms that most investors allocate to emerging markets for growth and diversification,” said Marc Zeitoun, Chief Product and Marketing Officer at Emerging Global Advisors. “Interestingly, although a third of the respondents indicated a likelihood of increasing their emerging markets allocation in 2016, many remain underweight the global opportunity emerging markets represent.” According to the IMF and the World Bank, EM represents 40% of global gross domestic product (GDP)1 and 25% of global gross market capitalisation.