In periods of high market volatility, we believe emerging market investors should focus on the quality factor and limit their exposure to state-owned enterprises. Alejandro Saltiel explains how our Emerging Markets ex-State-Owned Enterprises Fund (XSOE) can help in times of market stress.
Sometimes investors have the right idea but the wrong approach to investing in emerging markets equities. Kara Marciscano discusses how excluding state-owned enterprises from the investable universe can be a simple and effective way to not only tilt toward higher growth companies, but also reduce the risk of political influence.
Enthusiasm for market-cap weighted indexing rests on market efficiency. Occasionally systemic asset bubbles or excesses in individual company valuations can challenge that efficiency. Matt Wagner raises the question: should indexes screen on fundamentals for inclusion, and for weighting?
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.