NEW YORK -- Investors are increasing their bets in emerging markets funds, and so are fund companies.
STI Capital Management in Orlando, Fla., is one company that reckons emerging markets will be hot in 1997, so at the end of the month, it's opening a new fund, STI Emerging Markets Fund.
Analysts expect STI will be getting much more company.
"We've heard a lot of chatter from fund companies" about starting emerging markets funds, said Michael Lipper, head of Lipper Analytical Services Inc. Twenty-eight funds (or new classes of funds) opened in 1996, according to Lipper, which now follows 116 such funds in its database.
This year "will be an extremely strong year for emerging markets funds," said Gavin Quill, vice president of marketing at Scudder, Stevens & Clark in Boston. Scudder's emerging markets growth fund has pulled in $18 million so far this month, its best draw yet in its seven-month life. Scudder's Latin American fund has attracted $41 million, its largest inflow of money in three years.
Investors are betting that international markets, and especially emerging markets, will outperform Wall Street this year. So far in 1997, Russian, Turkish and Hungarian stock markets are the top-performing bourses in the world.
STI's fund will be managed by Pablo Salas, who also manages the firm's $18 million institutional emerging markets portfolio, which returned about 15 percent last year. That compares with 4 percent for the Morgan Stanley Capital International Emerging Markets Index and 11.2 percent on average for emerging markets mutual funds, according to Lipper.
Salas' biggest bet is Brazil, with 13 percent of his portfolio. Next is Argentina, with 8 percent.
Pub Date: 1/26/97