Emerging Global Advisors' Survey Finds Neutral Investor Sentiment Dominant in Emerging Markets

Jan 21, 2016, 09:02 ET from Emerging Global Advisors

NEW YORK, Jan. 21, 2016 /PRNewswire/ -- Emerging Global Advisors (EGA) today announced the results of its Emerging Markets (EM) Investor Sentiment Survey, a quarterly poll of asset managers and financial advisors focusing on their sentiment and equity allocations to emerging markets. The EGA EM Investor Sentiment Survey score declined 10% from 550 in the third quarter of 2015 to 495 in the fourth quarter, indicating investors were neutral on EM.

Key findings:

  • 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.
  • 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.
  • 59% expect to stay the course with their EM equity allocation over the next 12 months, while 33% expect to increase their EM equity allocation.
  • 91% identify growth or diversification as the primary reason for investing in emerging markets
  • Changes in valuations and commodity prices were the most cited triggers for changing EM allocations, followed by performance relative to other asset classes and technical factors (relative strength/momentum).

"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 capitalization.2

About the EGA EM Investor Sentiment Survey
A total of 100 asset managers and financial advisors, with over 60% managing more than $500 million in assets, participated in the digital survey between December 1 and December 31, 2015. To download the report, visit here.

About Emerging Global Advisors
Emerging Global Advisors (EGA) is a leading provider of strategic beta portfolios in emerging markets and we employ a disciplined, rules-based investment process rooted in research and portfolio strategy. Our investment strategies, including our EGShares suite of ETFs, are designed to help investors generate alpha within their emerging and frontier market allocations. We offer core equity, thematic and equity income emerging and frontier market exposures.

EGA Indices (EGAI), a separate group within EGA, develops strategic beta indices for emerging market exposure.

1Source: IMF - World Economic Outlook, October 2015. Global GDP and GDP Growth Rates, Emerging Markets reflect those countries classified as emerging market and developing economies.
2World Bank, March 2015.

Carefully consider the Fund's investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Fund's prospectus, which may be obtained by calling + 1 888 800 4347 or by visiting the Fund's website egshares.com to view or download a prospectus. Read the prospectus carefully before investing. Investing involves risk, including possible loss of principal.

Emerging market investments involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, from economic or political instability in other nations or increased volatility and lower trading volume. This Fund will concentrate its investments in issuers of one or more particular industries to the same extent that its Underlying Index is so concentrated and to the extent permitted by applicable regulatory guidance. Concentration risk results from maintaining exposure to issuers conducting business in a specific industry. Small-cap and mid-cap companies generally will have greater volatility in price than the stocks of large companies due to limited product lines or resources or a dependency upon a particular market niche. One cannot invest directly in an index.

ETF shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund.

Marc Zeitoun is a registered representative of ALPS Distributors, Inc. EGA and EGShares Funds are distributed by ALPS Distributors, Inc. Emerging Global Advisors acts as the investment advisor to the Fund. ALPS and Emerging Global Advisors are unaffiliated entities.

© 2016 Emerging Global Advisors, LLC. All rights reserved. EGA®, EGShares℠ and EGAI℠ are service marks of Emerging Global Advisors, LLC. All other trademarks, service marks or registered trademarks are the property of their respective owners.

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SOURCE Emerging Global Advisors