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Treasure hunt in emerging markets: Empirical evidence for European pension funds

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  • Cui, Yaolong
  • Muñoz, Fernando
  • Vicente, Rut

Abstract

This research analyzes the European pension funds' exposure to emerging markets, its evolution over time, and its impact on financial performance. For this aim, we study a sample formed by 822 European pension funds with an international equity investment vocation, covering the period from June 2008 to June 2024. To assess the impact of emerging markets exposure on financial performance, we employ panel regression models with time and fund fixed effects and robust standard errors. Our findings indicate that the average weight of the emerging markets in the portfolios analyzed is 25.44 %, with the highest weight reached in 2017 (28.5 %). When focusing on specific emerging markets/regions, the findings show that the weight of Asia Emerging has increased over time to the detriment of other markets such as Europe Emerging, Africa, or Latin America. The impact of the emerging market exposure on financial performance is mixed depending on the market analyzed and the period considered. Overall, greater exposure to the BRICS markets positively affects the performance achieved by pension funds' managers. Another finding reveals that pension fund managers seem to adjust their portfolio’s country/regional allocation over time, increasing the weight of emerging markets that positively impact financial performance, which provides added value to investors.

Suggested Citation

  • Cui, Yaolong & Muñoz, Fernando & Vicente, Rut, 2026. "Treasure hunt in emerging markets: Empirical evidence for European pension funds," Research in International Business and Finance, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:riibaf:v:81:y:2026:i:c:s0275531925004374
    DOI: 10.1016/j.ribaf.2025.103181
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