December 27, 2018 / 7:04 PM / 23 days ago

Fed survey points to a scaling back of bets on emerging market gains

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo

WASHINGTON (Reuters) - Most financial market credit officers surveyed by the Federal Reserve in November said their big clients were exposed to emerging markets but were scaling back bets emerging market assets would rise in value, the U.S. central bank said on Thursday.

The Fed surveyed senior credit officers at 23 institutions between Nov 6 and Nov 19, asking them about a range of market conditions.

“About three-fourths and two-thirds of the respondents reported that their hedge fund and mutual fund clients, respectively, have some exposure to emerging markets,” the Fed said, saying it had included questions on emerging market exposure given the “turmoil” seen in emerging markets this year.

For most client types, survey respondents said between two-fifths and three-fifths held net-long positions on emerging market assets, meaning they were betting on increases in the values of the assets. But most clients had also increased bets over the course of 2018 that the value of emerging market assets would fall, the Fed said, citing the survey responses.

Reporting by Jason Lange; Editing by Chizu Nomiyama

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