Most investors either ignore emerging markets or hand their money to active managers who underperform. Academic research points to a better approach: factor investing in emerging markets, targeting the company characteristics that have persistently driven higher returns.
The investment factor reveals a counterintuitive truth: companies that spend aggressively on growth tend to deliver lower returns than their cautious peers. With Big Tech pouring hundreds of billions into AI infrastructure, six decades of academic evidence suggest investors should be sceptical.
Robin Powell
Jan 208 min read
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