Are Emerging Markets Still Cheap?

Emerging markets have become increasingly popular and attracted huge sums over the past decade. Is this is warranted?

Dan Kemp 1 June, 2017 | 12:16PM
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Investors can be a funny breed. One minute, enthusiasm strikes and we collectively want the same thing. Next minute, we avoid it like the plague.

This summarises what has been a fascinating 10-years in financial markets. As investors herd from one view to another, we have witnessed extremes of euphoria and despair.

Beyond being a salient lesson to investors of the powerful impact of behavioural biases on investors, fund flows form two key functions. First, they provide excess returns to valuation-driven investors, as this form of investing is predicated on buying assets that the ‘herd’ has fled and owning them until the herd returns. Second, these flows provide a powerful market awareness tool.

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About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA

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