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.
Terry Smith's Fundsmith Equity fund has underperformed for four years, losing billions in outflows. But is this evidence of declining skill or simply bad luck? Academic research reveals it takes 36-800 years of data to statistically prove a fund manager has genuine talent rather than benefiting from chance. Smith's 14-year track record, despite early success, is statistically meaningless. His recent struggles with NVIDIA, Apple and Novo Nordisk may look like stock-picking err
TEBI
Jul 8, 20257 min read
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