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 fund industry says index concentration is the big risk. But the evidence points elsewhere. Compressed expected returns are what really threaten your long-term wealth — and the right response is simpler and cheaper than the industry would have you believe.
Terry Smith blames index funds for Fundsmith's five-year slump — but international market data, factor analysis, and 2024's high-dispersion conditions tell a different story. Here's what the evidence actually shows.
Robin Powell
Jan 157 min read
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