The most powerful actors in the financial world might well be the index providers. They essentially compel all passive investors when it comes to their asset allocation. They also create the benchmarks against which nearly all active investors are measured.
The state of play: When indices change, billions of dollars of money can end up moving as a result. When it comes to emerging markets, the two giants of the indexing world are the MSCI for stocks and the EMBI for bonds. When those indices are altered, all emerging-market fund managers, be they active or passive, will feel the consequences.