Emerging markets got big fast. So big, in fact, some analysts are comparing it to the tech-stock bubble of the late 1990s, which swelled and then burst, taking many investors' dreams with it, the Associated Press reports.
Until late May, emerging markets were a veritable money magnet. For example, the
Investors responded.
"It was very similar to the Nasdaq in the winter of '99," said Quincy Krosby, chief investment officer for
People put their entire portfolios in emerging markets, she said, ignoring stagnant domestic funds. In fact, in the first quarter of this year, world equity funds registered inflows of $79.7 billion, compared to $39.89 billion for domestic finds, according to research from the
Adding to the fervor were a number of high-profile, international initial public offerings, such as
Then, between May 9 and June 13, the sell-offs started, with the Brazilian market dropping 29.59%, stocks in India plummeting 32.44%, and the Mexican markets tumbled 24.72%, according to
Tobias Levkovich, chief U.S. equities strategist for
Since 2004, U.S. investors, individuals as well as hedge funds, invested $500 billion in emerging markets, according to Charles Biderman, chief executive for
"If the money stops going offshore and into U.S. stocks, this could be the hot market going forward," he said. "We hope. Fingers crossed."
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
