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Quality Stocks in Emerging Markets

Superior returns from betting on good business models?

Nicolas Rabener
10 min read
9 Mar 2026

SUMMARY

  • There is a clear rationale for high-quality stocks in emerging markets
  • However, these stocks gave up most of their long-term outperformance recently
  • The lack of funds in this space is surprising

INTRODUCTION

In our most recent research article (read Multi-Factor Investing in Emerging Markets), we noted that multi-factor ETFs have underperformed in emerging markets, even though academic data from the Kenneth R. French database indicates they should have delivered strong excess returns.

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