Emerging Markets - Research Paper 02
Blue Paper - Emerging Markets Evolution 02
Your returns may vary – Emerging Markets’ elevated risk premium needs to change
This is the second in a series of papers on current issues in Emerging Markets (EM) investing. In our first paper, we presented the broad case for EM investment, laying out the macro case and associated demographic drivers that underpin these significant, structural investment opportunities.
In this paper, we consider issues that can restrain returns, frustrate investors and elevate volatility. While the developing world offers a large, heterogeneous investing environment, a series of inefficiencies at the sovereign, corporate and index level can challenge returns. It is our view that governments, and companies, in the emerging world could improve their, and investors’, prospects through superior governance and transparency.