Key insights

  • Global emerging markets have provided very strong returns for long term investors.
  • However, investors have to be prepared to accept higher volatility over shorter periods of 3 years and less.
  • Significant performance dispersions across regions, countries, sectors and styles factors provide substantial opportunities for active managers.
  • Smart-beta or factor strategies have delivered mixed results – while Minimum Volatility and Sustainability factor indices have delivered strong results, traditional factor indices such as Value and Growth have disappointed.
  • The level volatility and dispersion of risk factor across major countries continue to rise, reflecting greater geopolitical risks and country level policy risks.
  • Despite the rising volatility (since 2017) of EM asset class, the correlations between BRICS constituents continue to diverge.


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