Global stock markets have been struck by a triple shock; global pandemic, energy price war and market rout from full valuation levels in developed markets. Each of these types of shocks has been seen, and recovered from, previously.
Welcome to Emerging Markets! A huge array of economies all at various stages of development and maturity with different capital market structures. Add in as many different currencies, political frameworks and policy stances and the result is a complex, diverse, evolving and inefficient market universe.
Passive investment funds have grown in popularity and offer one key benefit, immediate market beta. However, investors beware! A passive approach to investing in emerging markets equity has several explicit and implicit ramifications. We consider seven here.