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Pension funds broaden EM allocations, still boom or bust

The median emerging market equity allocation among plans surveyed by Pensions & Investments was 4.92% as of Sept. 30, up from about 3.9% in September of 2010. Over that period, the allocations have maintained relatively the same range, with the high end pulling back about 1 percentage point.

While the MSCI Emerging Markets index is up 6.8% since September 2017, trade war talks and the resurgence of the dollar have taken their toll on the corner of the global market, driving emerging market equities down about 7.9% since January. Between the start of 2010 and Wednesday, the emerging market index has returned 2% on an annualized basis, about 9% behind the S&P 500 index, with about 1.5 times the risk. Since the start of 2010, the MSCI Emerging Markets index has outperformed the S&P 500 on a monthly rolling annual basis 45 times with an average outperformance of 2.3%.