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Emerging Market Funds: Same, Same, but Different?

Divergent factor exposures

Nicolas Rabener
10 min read
15 May 2023

SUMMARY

  • Emerging markets offer divergent factor exposures across and within regions
  • Smart beta ETFs do not necessarily offer high factor exposures
  • It is all about fund selection

INTRODUCTION

We highlighted previously that the case for exposure to emerging markets (“EM”) stocks is not as clear as frequently highlighted by the marketing materials of asset managers (read The Case Against EM Equities). Sure, perhaps some of these markets have higher economic growth rates than Europe or the US, but there are also multiple concerns.

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