Active Management for Emerging Market Equities

Active Management for Emerging Market Equities

For long-term investors looking for strong returns, we believe that emerging markets should be an integral part of the overall portfolio. History shows that emerging markets have offered investors better relative global equity returns. Over the last decade, eight out of ten of the world’s top performing country returns have come from emerging markets. Given the breadth of emerging markets, a key challenge for investors is to find the best vehicle to navigate both the risks and opportunities within this broad asset class. We believe active management provides various advantages.

Investment Considerations — There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including the potential of loss of principal.

Emerging Markets Risk — The risks of foreign investments are typically greater in less developed countries, which are sometimes referred to as emerging markets. For example, political, legal and economic structures in these country may be changing rapidly, which can cause instability and greater risk of loss. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluation, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative. Similarly, investors are also subject to foreign securities risks including, but not limited to, the fact that foreign investments may be subject to different and in some circumstances less stringent regulatory and disclosure standards than U.S. investments.