Although large institutions have traditionally avoided emerging markets hedge funds, preferring their emerging market mutual fund brethren, the lofty returns of these specialty hedge funds in recent years is evidently making these investors think twice about the risky sector, The Wall Street Journal reports.

Flows to hedge funds that specialize in emerging markets rose 13% in 2005 to $5.3 billion, up from $4.7 billion in 2004, bringing total assets in the sector to $44.5 billion according to data from Hedge Fund Research.

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