With U.S. and China trade negotiations front and center, some investors are questioning whether they should have exposure to China in their portfolio. Rethinking exposure to state-owned enterprises within China can be one method that may actually enhance returns while keeping volatility under control.
International equity markets have made headlines this year for all the wrong reasons with lackluster performance and looming uncertainty. Should investors acquiesce and hold on for the ride? Our international multifactor approach offers investors a unique approach toward developed international equity markets.
Investing in emerging markets can have daunting levels of risk. Yet many investors continue putting their emerging markets allocation into one cap-weighted product, hoping it pays off without much damage. Instead, we suggest that our diversified emerging markets barbell approach has the potential to give investors the yield, volatility mitigation and returns they are looking for.
Through the first six months of the year, emerging markets have lagged most developed markets, despite entering the year poised for a rally and then falling during May’s sell-off. In light of this volatility, we believe a dividend-weighted approach to emerging market small-cap equities strikes an intriguing balance between return potential and volatility mitigation.