Key facts
- Two hedge funds specializing in emerging market debt are turning away investors.
- The decision is driven by a record rally and substantial cash inflows into emerging markets.
- One fund, Baillie Gifford's Scottish Mortgage Investment Trust, saw its net asset value increase by 70% in 2020.
The strong performance and investor interest in emerging markets have reached a point where some specialized funds are capping inflows. This indicates a potential saturation or a strategic decision by fund managers to protect existing investor returns by limiting further capital deployment. The rally in electric vehicle stocks has also been noted as a factor.