Emerging market ETFs experienced a torrid 2021 , driven by the sell-off in Chinese equities after a government crackdown on tech and private education spooked investors . Sentiment is improving , however , as 46 % of respondents expect to increase their allocation to emerging markets in the next 12 months while 25 % said “ maybe ” and 29 % said “ no ”.
How to play emerging markets is one of the toughest decisions for investors this year . Investors are divided on whether they will look to be more country-specific with their allocations , as 40 % stated they will be , while 28 % responded “ somewhat ” and 32 % said they will not be .
Interestingly , ETF issuers have started to be more proactive in enabling more targeted exposure . For example , Amundi launched the Amundi MSCI EM ex-China ESG Leaders Select UCITS ETF ( CNEG ) last November which allows investors to remove China from their broad EM bucket and be more targeted with their allocation to Asia ’ s largest economy .
Are you looking to be more country-specific with your allocation to emerging markets ?
In 2022 , do you expect to increase your exposure to emerging markets ?
22 % 20 %
28 % 25 %
28 % 40 %
Yes , both equity and fixed income
Yes , equity
Yes , fixed income
4 . Climate will become even more important in 2022
The role of the UN ’ s COP26 summit in Glasgow last year should not be underestimated in refocusing government and asset owners ’ efforts in tackling climate change . Some 64 % of respondents said COP26 will increase investor focus on allocating to climate strategies while 27 % said “ somewhat ” and 9 % said “ no ”. Furthermore , 68 % of respondents highlighted climate as the biggest megatrend they are focusing on this year , which further highlights that this issue is at the forefront of investors ’ asset allocation decisions .
of respondents highlighted climate as the biggest megatrend
Following COP26 , are you anticipating a growing investor focus on climate allocations ?