Key Points
- Emerging Market Equity Disappointment Persists: EM equities (in AUD terms) have delivered mediocre returns in both absolute and relative terms. Many active managers with high allocation/ high beta to EM equites have faced major headwinds in their portfolios.
- High EM/DM Beta Sensitivity Imposes Major Headwinds for Global Equity Managers: EM equities have disappointed, both in absolute and relative terms. Issues with Russian exposure and sanctions have given added headache to investors. It remains to be seen if the next 10 years will result in more favorable outcome for managers with high beta to EM/DM equities.
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