U.S. Asset Managers Under-allocated to Emerging Markets Despite Outperformance

U.S. stock investors pumped fresh funds into emerging markets after recent outperformance. However, they remain under-allocated by a key measure, as a combination of "home bias" and lingering concern about volatility have restrained client interest.

In 2017, they increased allocation by a near $52 billion in the first quarter. U.S. domiciled active managers have just 5 percent of assets under management allocated to emerging market equities, according to research data from eVestment. 

With global economic growth trends favoring the fast-growth asset class, investors will need to move into emerging markets to continue reaching gains above 5 percent in bond and equity portfolios, said Krishna Memani, chief investment officer at OppenheimerFunds. 

"In a growth-short world, emerging markets are going to be the primary source of growth for the forseeable future," Memani said. "That is decades." 

Read more at Reuters.