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Kenan Institute 2025 Grand Challenge: Skills Gap
Research • Insight • Growth
Research
Mar 5, 2024

Global Fund Flows and Emerging Market Tail Risk

Abstract

Global risk and risk aversion shocks have distinct distributional impacts on capital flows with salient consequences for tail risk in emerging markets. Open-end mutual fund trading provides a key mechanism linking shocks facing global investors to extreme capital flow realizations. The effects are heterogeneous across asset classes and fund types. The limited discretion and higher conformity of passive fund investments linked to benchmarking amplify pass-through effects that engender abnormal co-movements in emerging market flows.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals.  


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