Diversification within Emerging Markets Equity Products
Amidst U.S. institutional investors' steadily increasing appetite for emerging markets investment, there has been marked interest in identifying sub-categories of products within emerging markets equity, and the possible diversification benefits through pairings of managers from different sub-categories. We have defined several ways of sub-categorizing emerging markets equity products, including investment style, investment process, and quantitative versus fundamental orientation. Our comparison of assets deployment and investment performance lends strength to the argument for, and the ability to, diversify by investment style in spite of potential complications. However, our analysis on other sub-categorizations is less conclusive to support diversification.