Inefficiencies of Passive Investing in Emerging Markets

Active vs. Passive Management 

Mirae Asset's Senior Portfolio Manager, Malcolm Dorson, discusses the potential benefits of active management and the inefficiencies of passive management in emerging markets (EM).

For long-term investors looking for strong returns, we believe that EM should be an integral part of the overall portfolio. Given the breadth of EM, 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.

For a list of the top ten holdings of the Emerging Markets Great Consumer Fund as of the most recent quarter-end click here. Holdings are subject to change at any time. 

Important Information

The views and information discussed in this video are subject to change. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the countries or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation.

Past performance is no guarantee of future results.

Investment Risk — There can be no guarantee that any investment 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, legal, political and economic structures in these countries 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 US investments. Investments in China A-shares carry increased risks, most notably liquidity and credit risks.