“The positive outlook is the most common answer, replacing neutral which has been the most common answer in the past,” said Marc Zeitoun, Emerging Global Advisors chief product and marketing officer, on a Thursday conference call. “Few are thinking about lowering their allocations. It’s like Brexit is a non-event in terms of emerging markets investing.”
Over the past 12 months, 78 percent of the respondents say they have increased or maintained their emerging markets allocation, only 22 percent report reducing their allocations.
Investors are also considering specialized exposure to emerging markets through smart beta, but advisors still favor active management. According to Emerging Global Advisors, nearly half of its respondents (49 percent) have replaced or expect to replace an active manager with a smart-beta ETF, but only 36 percent have done so or would do so with their emerging market allocations.
“In terms of asset classes, institutional investors particularly still believe that emerging markets are best served by asset managers,” Zeitoun said. “Non-U.S. asset classes are the slowest in adopting smart beta, but even that is a stat that is increasing.”
Currently, smart-beta products comprise 9.2 percent of the emerging market ETF universe, according to Emerging Global Advisors.
For its survey, Emerging Global Advisors interviewed 83 asset managers between June 1 and July 7, 2016.