TY - BOOK ID - 135404593 TI - Benchmark-Driven Investments in Emerging Market Bond Markets: Taking Stock AU - Arslanalp, Serkan. AU - Drakopoulos, Dimitris. AU - Goel, Rohit. AU - Koepke, Robin. PY - 2020 SN - 1513558838 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - United States KW - Exports and Imports KW - Finance: General KW - Investments: Bonds KW - Industries: Financial Services KW - Financial Crises KW - Portfolio Choice KW - Investment Decisions KW - General Financial Markets: General (includes Measurement and Data) KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - International Investment KW - Long-term Capital Movements KW - Finance KW - Investment & securities KW - International economics KW - Emerging and frontier financial markets KW - Bonds KW - Mutual funds KW - Securities markets KW - Capital flows KW - Financial markets KW - Financial institutions KW - Balance of payments KW - Financial services industry KW - Capital market KW - Capital movements UR - https://www.unicat.be/uniCat?func=search&query=sysid:135404593 AB - This paper reviews the role of benchmark-driven investments in EM local bond markets. We provide an overview of how key EM bond benchmark indices are constructed, how they affect the behavior of investment funds, and what are the likely implications for capital flows and policy-making. Several methods are presented suggesting that the amount of assets benchmarked against widely followed EM local-currency bond indices have risen fivefold since the mid-2000s to around $300 billion. Our review suggests that the benefits of index membership may be tempered by portfolio outflow risks for some countries. This is because benchmark-driven investments may increase the importance of external factors at the expense of domestic factors, raising the risks of outflows unrelated to recipient country fundamentals. Some countries may be disproportionately exposed to these risks, reflecting the way the indices are constructed. ER -