Investors Flock to Emerging Markets Funds

Investors are regaining their appetite for risk, particularly emerging markets funds, The Wall Street Journal reports.

Since the beginning of March, the MSCI Emerging Markets Index has risen 50%, and in the week ended May 6, investors poured $4 billion into emerging markets funds, the eighth-biggest week ever for inflows into the funds.

Investors generally seem to believe the financial crisis is waning and that the effects of China’s massive stimulus plan will be realized.

“These moves back upward are real,” attested Robert Weissenstein, chief investment officer of the private bank at Credit Suisse, who believes that the economies of Brazil and China will outpace developed nations.

“Several emerging economies entered the crisis with better initial conditions and will likely maintain a better economic performance than most industrial countries going forward,” said Pimco’s Mohamed El-Erian.