The volume of opinion surrounding emerging markets can, at times, seem deafening, writes Peter Elston, chief investment officer at Seneca Investment Managers.
For simplicity's sake, I will discuss just two key points. The first relates to the asset class' systematic returns; the other to its non-systematic, or idiosyncratic, returns. My conclusion is that the performance of emerging markets generally may well continue to be poor but because levels of market efficiency are low, moneymaking opportunities abound. If you are not careful, emerging markets can be horrible places to invest. True, economic growth has been a lot higher than in developed markets, but that has not translated into higher returns for shareholders. Far from it. Since ...
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