EM equities may provide enhanced return and diversification benefits—but not all EM portfolios are created equal, and many EMs have matured into more developed markets.
For institutional investors to realize these potential advantages, it is critical to look beyond indices, exploit inefficiencies, and identify companies with distinct connections to their local economies. Many of these businesses are in “old economy” sectors that are value-oriented and may benefit from the cyclical upswing underway in the recovery.