Emerging or submerging markets: Does it matter?

Taking an index agnostic approach to investing in emerging markets can be much more profitable over time than simply focusing on the index.

We have seen that within our liquid universe of 1000 emerging market and almost 400 frontier market stocks there are plenty of great growth stories despite a generally poor market environment. Even on a macro basis, there are overall markets that have done well despite the broader asset class being under pressure. For example, over the past year emerging markets are down over 15% but markets like Pakistan, Hungary, South Africa and even China are positive. Emerging market valuations are currently cheap with the market trading at price to book ratios close to the levels we saw in 2008 ...